A group of 29 defendants are subject to a permanent ban on deceptive marketing and negative option billing pursuant to an order obtained by the Federal Trade Commission.
The June 2015 complaint against seven individuals and 15 companies alleged that they sold skincare products such as Auravie, Dellure, and the Miracle Face Kit by offering "risk-free" trials to consumers, and by asking for credit card information to cover shipping costs. However, the defendants actually used the information to enroll consumers in a program at a rate of up to $97.88 per month for other products they did not order, the FTC said.
The defendants—a total of 33 in the case after the agency filed an amended complaint in October 2015 adding two individuals, another eight corporate defendants and one corporate relief defendant—often made it difficult to cancel membership in the program, stop the charges, or obtain a refund, the FTC alleged.
In addition to violating the Restore Online Shoppers' Confidence Act and the Electronic Funds Transfer Act, the defendants ran afoul of Section 5 of the Federal Trade Commission Act by falsely claiming to be accredited by the Better Business Bureau, the agency said.
Over the last few months, five of the defendants have agreed to court orders with the agency and the FTC obtained default orders against another 19 defendants in the California federal court overseeing the case. Only four defendants remain in active litigation with the agency.
Each of the orders prohibits the defendants from using negative option programs and from engaging in deceptive advertising. Monetary judgments of more than $72.7 million were largely suspended, with the exception of $2.7 million that will be turned over to the FTC.
To read the complaint and the final orders in FTC v. BunZai Media Group, click here.
Why it matters: "These defendants tricked people into paying for skin care products and abused the credit card system to extend their scheme," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "The Commission will continue to attack scams that rely on supposed 'free trial' offers and unauthorized credit card charges."