Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Skincare operators deceptive marketing practices halted, (Jun 25, 2015)
Organizations Mentioned:Bunzai Media Group, Inc. | Bureau of Consumer Protection | Pinnacle Logistics, Inc.
By Linda O’Brien, J.D., LL.M.
A group of marketers in California have been stopped from using allegedly bogus “risk free trial” offers to sell skincare products online, the FTC announced today. A federal district court has issued a temporary restraining order against the marketers, halting their deceptive marketing practices, freezing their assets, and appointing a receiver over their business.
In June 16, 2015, the FTC filed a complaint in the federal district court for the Central District of California, (FTC v. Bunzai Media Group, Inc., File No. 152-3067), charging seven individuals and 15 companies that sell Auravie, Dellure, LéOR Skincare, and Miracle Face Kit brand products with using deceptive offers to trick consumers into providing their credit or debit card information, and then charging them for the full price of the product and enrolling them in a buying program with recurring fees.
According to the FTC’s complaint, since at least 2010, the defendants have marketed and sold skincare products on a variety of websites, such as aurviefreetrial.com, auraviewtrialkit.com, and mymiraclekit.com. The defendants use pop-up advertisements, banner ads, and advertising space on third-party websites, including Amazon.com, Huffingtonpost.com, and Lowes.com, to tout “risk free trial” offers to direct consumers to their websites, where they are instructed to provide their credit or debit card information to pay shipping fees of $4.95 or less to receive the trial offer.
The FTC alleges that consumers who provide their credit card information soon discover that they have been charged much more – typically $97.88 – under terms hidden in fine print on the defendants’ websites. Consumers also are enrolled without their consent in subscription plans under which they are shipped more products and charged recurring fees. The defendants make it difficult to cancel the memberships, stop or avoid the charges, or obtain a refund.
“The sellers of AuraVie tricked people into paying a lot of extra money for skin care products,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Companies need to give clear, honest information about charges. If a company advertises a ‘risk free trial,’ then that’s what it must provide.”
Companies: Bunzai Media Group, Inc.; Pinnacle Logistics, Inc.
News: ConsumerProtection FederalTradeCommissionNews