It was a big week for consumer refunds, as the Federal Trade Commission (FTC) mailed almost $2 million to consumers for bogus weight loss products and Amazon launched the refund process as part of its deal with the agency in an action involving in-app purchases by children.
The agency announced that it sent 38,553 checks totaling $1.9 million (with an average payment of $49.66) to consumers who purchased Pure Health or Genesis Today green coffee bean extract supplements. Last year, the FTC sent refunds to 191,748 online purchasers with checks totaling $9,190,842.68, or an average payment of $47.93.
As part of a settlement, the defendants agreed to pay the refunds based on their unsubstantiated weight loss claims for their products, including that users could lose 17 pounds and 16 percent of their body fat in 12 weeks without diet or exercise. The defendants disseminated their false claims via fake websites designed to look like legitimate news sites, the agency alleged, as well as television programs like The Dr. Oz Show and The View.
In the Amazon action, the refunds were based on unauthorized in-app charges incurred by children. More than $70 million in charges incurred between November 2011 and May 2016 may be eligible for refunds, the FTC noted.
The agency reached a deal with Amazon earlier this year where both parties agreed to drop their appeals of a Washington federal court’s grant of summary judgment in the FTC’s favor. The settlement followed similar agreements with other tech companies (see https://www.manatt.com/insights/newsletters/advertising-law/ftc,-apple-reach-$32-5m-deal-over-in-app-purchases#Article5 and https://www.manatt.com/insights/newsletters/advertising-law/complimentary-tcpa-update-webinar-the-year-in-rev#Article1) in similar suits.
To read about the green coffee bean extract supplement refunds, click here.
For details about the Amazon refund process, click here.
Why it matters: The sizable settlements in the in-app purchase actions (up to $70 million in refunds from Amazon, $32.5 million from Apple and $19 million from Google) reiterate the importance of obtaining express consent before placing charges on consumers’ credit or debit cards, while the additional refunds in the green coffee bean cases serve as a reminder about the FTC’s continued focus on weight loss claims.