The Federal Trade Commission (FTC) recently brought a complaint against NutraClick, LLC under the Federal Trade Commission Act and Section 5 of the Restore Online Shoppers’ Confidence Act. FTC v. NutraClick, LLC, No. 16-6819 (C.D. Cal., filed September 12, 2016).
FTC alleged the company failed to clearly disclose that consumers who ordered sample products from NutraClick’s website would automatically be enrolled in a membership program for nutritional supplements and beauty products, costing between $29.99 and $79.99 per month. FTC said complaints had been filed by at least 70,000 people and that the company made tens of millions of dollars from the membership charges.
NutraClick and FTC have now reached an agreement which includes a change to NutraClick’s billing practices. Among other things, the stipulated order prohibits the misrepresentation of costs. NutraClick will not be allowed to obtain customers’ billing information until charges have been disclosed and in cases where the cost will increase over time, consumers must be informed upfront. If charges will automatically recur until cancellation, the company must also disclose that information. The range of costs and deadlines for cancellation must also be communicated before the company obtains customers’ billing information. NutraClick must also pay FTC $350,000.