The FTC and attorneys general in Utah and Nevada accuse Lens.com of advertising artificially low contact lens prices and adding mandatory fees late in the checkout process.
Regulators allege the company's "Taxes & fees" charges routinely double the advertised price and have cost consumers hundreds of millions of dollars.
The lawsuit also targets Lens.com's AutoRefill subscription practices, alleging consumers aren't given clear information about added fees or how and when to cancel.
Consumers shopping online for inexpensive contact lenses may have gotten a much different price when they reached the end of the checkout process, according to a new federal lawsuit.
The Federal Trade Commission (FTC), joined by the attorneys general of Utah and Nevada, has sued online contact lens retailer Lens.com, accusing the company of operating what regulators describe as a long-running deceptive pricing scheme.
The complaint, filed in U.S. District Court for the District of Nevada, also names affiliated company Speed Commerce LLC.
The central allegation is that Lens.com attracts shoppers with unusually low prices displayed in sponsored Google search results and on its website, only to add a substantial mandatory charge labeled "Taxes & fees" during checkout.
The FTC says those charges routinely double the advertised cost of the lenses and alleges the practice has cost consumers hundreds of millions of dollars.
"Millions of Americans rely on contact lenses to perform their daily tasks," Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said in announcing the lawsuit.
Mufarrige said the agency alleges Lens.com advertised one price but charged consumers substantially more when they checked out. As of the time of publication, the defendants had not issued a public comment.
The fee may be easy to miss
The government contends the problem isn't simply that Lens.com charges additional fees. The lawsuit alleges the company makes it difficult for consumers to see them before completing their purchases.
According to the complaint, the "Taxes & fees" line can appear below the visible portion of the checkout screen. At the same time, consumers are presented with a prominent "Continue" button.
The FTC alleges shoppers who click the button without scrolling farther down the page may never see the fee as a separate line item.
Regulators also object to the wording 'Taxes & fees'
The complaint alleges that the description can lead consumers to believe at least some of the charge represents state sales taxes. But many states exempt contact lenses from sales tax, while some states have no sales tax, the FTC said. Lens.com allegedly uses the same description regardless.
The result, regulators contend, is that consumers have difficulty comparing Lens.com's actual price with the prices charged by competing contact lens sellers.
The lawsuit goes beyond one-time purchases. Regulators allege Lens.com uses its advertised low prices to encourage consumers to sign up for its AutoRefill program, which automatically bills customers for recurring shipments.
The complaint says Lens.com fails to clearly disclose the mandatory "Taxes & fees" charge before obtaining billing information from AutoRefill customers.
It also alleges the company doesn't adequately explain how consumers can cancel the subscription or the deadline for canceling before another shipment is charged.
The FTC and the two states contend the practices violate several federal and state laws, including the FTC Act and the Restore Online Shoppers' Confidence Act, which regulates certain online subscription and negative-option programs. Utah and Nevada are also alleging violations of their state consumer protection laws.
The FTC voted 2-0 to authorize the lawsuit. The government is seeking a permanent injunction, monetary judgments, civil penalties, and other relief. The case remains pending, and the allegations have not been proven in court.