Anyone who has bought a product online only to find themselves mysteriously enrolled in a subscription program and receiving that product month after month after month can start to rest easy. In addition to going after companies like Adobe that make it hard to cancel a subscription, the Federal Trade Commission (FTC) is hot on the trail of online stores that engage in negative option marketing.
A U.S. district court in central Florida has unsealed a complaint from the FTC accusing two related groups of defendants of defrauding consumers nationwide.
Specificallky, they are charged with enrolling consumers, without their knowledge, into continuity plans in which personal care products are repeatedly shipped and charged for products they have not agreed to purchase.
Allegedly, according to the complaint, the defendants sucked consumers into their site using ads for “free” CBD and Keto-related personal care products, billing many for products they did not consent to purchase, signing many up for unwanted continuity plans, and debiting money from their bank accounts without prior authorization.
Furthermore, some of the defendants are alleged to have used straw signers to set up bank accounts for shell companies for the purpose of laundering credit card payments.
“These defendants bilked consumers out of millions of dollars by repeatedly charging them for products they never ordered or agreed to purchase,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to aggressively pursuing companies and individuals involved in these unauthorized billing scams.”
Legion Media defendants are accused of operating two types of unauthorized billing scams. In one, the defendants market products that supposedly promote supplements for things that consumers are anxious to change: weight loss, clear skin, or other health benefits.
But, by the time someone gets to the site’s checkout, they're charged more than the advertised price and enrolled in continuity plans without ever saying yes.
The other fast one that Legion Media allegedly pulled was sending out business impersonation emails and messages inviting them to pay a small shipping fee for a supposedly free “gift” online. However – and you know where this is going – after someone uses their credit or debit cards to pay that shipping fee, they incur recurring unauthorized charges on their cards from one of these fake companies.
Tied into this scheme is a company called Sloan Health. For a price, anyone can pay Sloan to create an anti-aging cream, weight loss gummy, moisturizers, detox cleanses, anti-aging creams, brain/memory stimulants, etc.
Where Sloan comes into the picture is that it reportedly worked together with Legion Media by labeling and shipping the deceptively marketed personal care products and handling the large volume of customer returns.
The complaint states they shared in the profits of the scheme and distributed the products without providing any information that would reveal their identity to consumers, using only the generic name “Fulfillment Center” and a post office box address in Smyrna, Tennessee.
ConsumerAffairs asked Sloan Health for comment, but did not immediately hear back.
This may be a warning shot that the FTC is sending out to other companies that do the exact same thing. And, there are lots more of these unscrupulous online stores, as ConsumerAffairs found out in doing research related to the Shark Tank weight loss gummy scam.
Buying supplements online is a bad idea
The vitamin and supplement industry is big business. There are about 90,000 different dietary supplement products available online and on U.S. store shelves, and added up, consumers are spending $30 billion on those products to lose weight or whatever it is they want out of their lives.
Does this stuff really work? Dr. Thunder Jalili at the University of Utah Department of Nutrition and Integrative Physiology says the science is not clear that these supplements are actually effective.
It’s a pipedream to think that getting 10,000% of your daily suggested dose of Vitamin C will provide any extra benefit than just getting the recommended amount, Jalili suggested in a recent podcast. He went on to say that it’s folly for anyone to think that a super high dose of vitamin C would reduce cold symptoms or prevent illness.
However, if you have questions about supplements, Jalili says your doctor isn’t the right person to go to. From his perspective, a doctor will only have knowledge of nutrition if they are self-motivated and self-educated.
He thinks that when it comes to supplements, it’s best to go to a certified nutritionist. One good place to find one is EatRight.org; another is the Academy of Nutrition and Dietetics.