The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the government's allegations, which have not yet been proven.
"The Federal Trade Commission (FTC) has brought a law enforcement action against the above company alleging the company received more than $450 million from consumers by luring them into "free" or "risk-free" offers. Consumers were then charged for products or services they did not want or agree to purchase. As part of its ongoing efforts to stamp out online fraud, FTC seeks to stop the operation's illegal practices and make the defendants repay affected consumers."
"According to FTC's complaint, the companies used deceptive tactics in offering "free trials" for various online products, including acai berry weight loss pills, teeth whiteners, health supplements, work at home schemes, free credit reports and penny auctions."
"According to FTC, the companies obtained consumers' credit or debit card account numbers by promising they would only pay small shipping and handling fees and also promised phony "bonus" offers for signing up. Consumers had no reason to believe they would be charged for the trial product or extra bonus products, but they were often charged for the "free" trial and monthly recurring fees. Although the defendants offered a money-back guarantee, consumers were often unsuccessful in canceling the charges or obtaining refunds and the process involved time-consuming phone calls and other steps that made the deals far from risk free."
"The FTC further alleged that the defendants provided merchant banks with false or misleading information, in order to acquire and maintain credit and debit card processing services from the banks in the face of mounting chargeback rates and consumer complaints. The companies also allegedly violated the Electronic Fund Transfer Act and Regulation E (issued by the Federal Reserve System's Board of Governors) by debiting consumers' bank accounts without their signed written consent and without providing consumers with a copy of the written authorization."
The Commission files a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.
The entire FTC complaint can be found at the link below.