We love golf, cooking, and the Restore Online Shoppers’ Confidence Act (“ROSCA”), so when the FTC brings a case involving all of this, we are compelled to blog. As it is almost Masters time, please feel free to put on your green jacket and read on.
On March 24th, the FTC filed suit in California against a group of online marketers for violating the FTC Act and ROSCA based on the defendants’ free trial/negative option marketing for golf-related products and cooking gadgets. According to the Complaint, the defendants’ websites, TV infomercials, and emails deceive consumers into believing that the products and services advertised are free by failing to clearly and conspicuously disclose that consumers would be charged if they did not cancel the “free trial” or return the “free” product. For instance, according to the Complaint, the Tour Z Golf Balls’ website’s first page makes a prominent claim that consumers can try the golf ball for free. See below.
Unfortunately, the trial was not free. Instead, if the consumers did not cancel and return the balls within a certain time period, the defendants would charge the consumers’ credit cards. Notably, according to the FTC, the disclosure below was inadequate, because it appeared “below the fold,” below the “Order Now” button, and was unclear that the “free trial” converts to something you have to pay for unless returned.
The FTC made similar allegations regarding websites for cookware products offered on a free trial. The FTC also claims that the defendants “three putted” on their cancellation mechanism (ROSCA requires an easy one) by burying details of the process that could only be reached through a small hyperlink.
It’s spring, the time we get our games back into shape, and this suit serves as a lesson for online marketers to adequately disclose the material conditions to their “free” trial offers. Failing to do so may land you in an FTC hazard. In addition, for those who hoped ROSCA enforcement would fade away with the Ohlhausen Administration, that hope appears to have missed the green. FORE!!!