The Federal Trade Commission filed suit in California federal court against 7 individuals and 15 companies that allegedly scammed consumers with deceptive “risk-free trial” offers to sell skincare products. It alleged violations of the Federal Trade Commission Act, the Restore Online Shoppers’ Confidence Act, and the Electronic Funds Transfer Act.
Since at least 2010, the defendants marketed and sold skincare products like Auravie, Dellure, and Miracle Face Kit on sites such as auraviefreetrial.com and auravietrialkit.com. The products were also promoted in pop-up ads, banner ads, and ad space on third-party websites with “risk-free trial” offers.
Consumers were instructed to provide their credit or debit card information to cover $4.95 shipping fees for the trial offer. According to the FTC, the defendants used the payment information to charge consumers full price (typically $97.88) if the product wasn’t returned within 10 days—and then enrolled them in a subscription program where they received additional products and incurred more fees. The full terms of the offer were “hidden in fine print” on the defendants’ websites, according to the agency’s complaint, and they often made it difficult to cancel membership in the program, stop the charges, or obtain a refund.
Reinforcing the false impression that consumers will receive a free shipment, the defendants sent confirmation e-mails that displayed no charges for the “risk-free” offer other than the shipping and handling fees. In addition, the defendants touted themselves as accredited by the Better Business Bureau with an “A-” rating, when they were actually unaccredited and had received an “F” rating, the agency added.
A judge issued a temporary restraining order against the defendants, halting their marketing practices, freezing their assets, and appointing a receiver over the business. The FTC said it will continue to pursue the case and seek a permanent order prohibiting the defendants from engaging in the allegedly illegal conduct at issue and requiring them to refund consumers.
To read the complaint and the court’s TRO in FTC v. BunZai, click here.
Why it matters: The action provides an important reminder to advertisers to “give clear, honest information about charges,” Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, said in a statement about the case. “If a company advertises a ‘risk-free trial,’ then that’s what it must provide.” Compliance with the EFTA and ROSCA remains important to the agency, which also noted that misrepresentations about third-party ratings—such as BBB rankings—may be actionable under the FTC Act.