Government Actions
Agency: Federal Trade Commission (FTC)Washington
Description:
On October 13, 2016, the Federal Trade Commission (FTC) permanently barred this company and its marketers from the deceptive marketing and billing tactics they allegedly used to promote their skincare products.
In a complaint filed by the FTC on June 25, 2015, the company is alleged to have used bogus risk free trial offers to sell their skin products online. According to the complaint, Since at least 2010, the 15 companies sold and marketed Auravie, Dellure, LéOR Skincare, and Miracle Face Kit brand products on a variety of websites and used pop-up advertisements, banner ads, and advertising space on third-party websites to tout “risk free trial” offers to direct consumers to their websites. Customers were instructed to provide their credit or debit card information to pay shipping fees of $4.95 or less to receive the trial offer. However, after the companies obtained their credit or debit card information, consumers were charged the full price of the product (typically $97.88) and enrolled them in a buying program with recurring fees. At that time of the complaint the federal district court issued a temporary restraining order against the companies.
The Commission charged the defendants with violating the FTC Act, the Restore Online Shoppers’ Confidence Act, and the Electronic Funds Transfer Act. Each final order bans the defendants from selling products through a “negative option,” in which the consumer’s silence is interpreted as consent to receive and pay for goods and services. The orders also bar them from future deception and credit card laundering. The orders require responsible individuals to surrender virtually all of their assets to the FTC, totaling over $2.7 million.
Details of the action can be found here.
Date of Action: 10/13/2016