free

Free Trial Law and the FTC

September 10, 2019 by David Klein

September 10, 2019

On July 12, 2019, the Federal Trade Commission (“FTC”) filed a complaint against AH Media Group, LLC, and its owners, Henry Block and Alan Schill (collectively, “Defendants”), for allegedly violating certain free trial laws as codified in Section 5(a) of the FTC Act, Section 4 of the Restore Online Shoppers’ Confidence Act (“ROSCA”), Section 907(a) of the Electronic Funds Transfer Act (“EFTA”), and Section 1005.10(b) of Regulation E, respectively. The Defendants have agreed to a preliminary injunction, barring them from continuing to run negative option plans tied to “free” trial offers.

How did the Defendants’ “free” trial offers allegedly violate free trial law?

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Internet Marketers Involved in Free Trial Law FTC Settlement

February 7, 2019 by David Klein

February 7, 2019

Last week, the Federal Trade Commission (“FTC”) announced that it will be mailing over $6 million dollars in checks to consumers who purchased certain health-related products and services. This money will be returned to consumers per the terms of a settlement that the FTC reached with three individuals and 19 companies that they control, collectively known as Tarr, Inc. (“Tarr”). The underlying free trial law complaint alleged that Tarr violated Section 5 of the FTC Act, the Restore Online Shoppers’ Confidence Act, and the Electronic Fund Transfer Act (“EFTA”), by using “free” trial offers to enroll consumers into negative option programs without their consent. The FTC’s free trial law complaint sought a permanent injunction, restitution, disgorgement, and costs.

How did the misuse of the word “free” result in Tarr being named in an FTC Complaint?

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Online Lingerie Marketer Settles Negative Option Lawsuit With FTC

November 22, 2017 by David Klein

November 22, 2017

negative-option-lawsuit — Negative Option Lawsuit Settles.

The Federal Trade Commission (“FTC”) has announced that online lingerie marketer AdoreMe, Inc. (“AdoreMe”) has settled claims alleging that its deceptive negative option enrollment and cancellation practices violated both Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act. The underlying complaint in the negative option lawsuit alleged improper use of a negative option continuity plan, where consumer credit cards were billed $39.95 a month on a recurring basis until consumers attempted to cancel their subject plans. The complaint explains that the defendants failed to include clear and accurate disclosures concerning the terms and conditions of their negative option plans and made it difficult for customers to cancel their memberships.

What Else Did the FTC Deem Violative of Applicable Law?

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FTC Mails Free Trial Lawsuit Refund Checks

October 13, 2017 by David Klein

October 13, 2017

This Tuesday, in furtherance of the terms of settlement of a 2014 “free trial” lawsuit, the Federal Trade Commission (the “FTC” or “Commission”) began mailing approximately $10 million worth of refund checks to hundreds of thousands of consumers who requested free trials of certain dietary supplements and weight loss products but were ultimately required to pay for same.

Why did the FTC take issue with the subject “free” trial offers?

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FTC Lawsuit Alleging Deceptive Marketing of “Free” Products and Continuity Plans Settles

September 18, 2017 by David Klein

September 18, 2017

The Federal Trade Commission (“FTC”) has announced that ten online marketers of cooking and golf-related products have agreed to settle claims alleging violations of the FTC Act and the Restore Online Shoppers’ Confidence Act, based on the marketers’ alleged improper use of two types of negative option offers: (i) continuity plans, where consumer credit cards are billed on a recurring basis until consumers cancel their subject plans; and (ii) purportedly “free” trial offers, where consumers receive goods or services for a trial period for free (or for a nominal fee), and are charged after the trial period ends unless the consumers return the products or cancel the plan. The complaint alleged that the defendants failed to include clear and accurate disclosures concerning the terms and conditions associated with their negative option plans.

Why Did the FTC Take Issue with the Subject Continuity Plans and “Free” Trial Offers?

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FTC Hits Marketers with Negative Option Lawsuit

August 17, 2017 by David Klein

August 17, 2017

Last month, the Federal Trade Commission (“FTC” or “Commission”) filed a negative option lawsuit in a Las Vegas federal district court against a tangled web of business entities and related individuals in connection with the defendants’ low-cost “trial” marketing practices.

What should marketers know before offering free or low-cost trials?

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FTC Sues Over Free Marketing Campaign

April 3, 2017 by David Klein

April 3, 2017

The Federal Trade Commission (the “FTC” or “Commission”) recently sued six California businesses and their respective owners and officers in federal district court in connection with the defendants’ allegedly deceptive free marketing practices.

What should sellers and marketers know before offering free or risk-free trials?

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