FTC Announced Recovery of Nearly $1 Million For Consumers Subject To Deceptive
On January 25th, 2023, the Federal Trade Commission (FTC) announced that it has recovered and will return more than $970,000 to consumers affected by deceptive billing practices. The FTC determined that NutraClick LLC—A Boston, MA company—unfairly charged people for unwanted monthly subscription fees for health supplements and cosmetics products. Within this blog post, our Miami deceptive & unfair trade practices lawyers explain the enforcement action taken by the FTC and discuss your options under Florida law if you suffered damages due to deceptive billing.
FTC Enforcement Action: Deceptive Billing Practices By Health Company
According to enforcement action taken by the FTC, NutraClick LLC will return $973,000 to more than 17,000 customers nationwide, including in Florida. The FTC determined that the company improperly used deceptive billing practices to enroll these customers into unwanted monthly subscriptions. Additionally, the consumers were materially misled regarding the steps that they had to take to stop the recurring monthly subscription charges on their credit card or debit card. The FTC notes that affected consumers should receive a refund within the next three months.
In its investigation of the company, the FTC determined that NutraClick, LLC effectively “lured” consumers in with the promises of “free samples.” However, the company that used private consumer information to charge them monthly subscription fees that were never knowingly authorized. The FTC states that consumers were simply misled about how the free sample process worked and what they would have to do to cancel future monthly subscription charges.
An Example of Negative Option Marketing Gone Too Far
As part of the enforcement action, NutraClick, LLC is barred from engaging in further negative option marketing. Negative option marketing is a marketing strategy where a company enrolls a customer in a recurring service or product shipment program, usually after the customer has signed up for a free trial or introductory offer. Unless the customer specifically cancels the recurring service, they are automatically charged for the next shipment. It is not unlawful as a practice. However, there are strict rules in place regarding negative option marketing. A company can be held liable for deceptive and unfair practices.
The FDUTPA Allows Business and Consumers to Hold Companies Liable for Deception
The Florida Deceptive and Unfair Trade Practices Act (FDUTPA) is an important state law that provides a framework for protecting consumers and businesses from deceptive and unfair trade practices. Notably, allows consumers and businesses to hold companies liable for any deceptive or unfair acts, including false advertising and deceptive billing practices. The FDUTPA was enacted, in large part, to ensure that Florida residents and businesses have a way to enforce FTC regulations. Unlike the federal FTC Act, the FDUTPA allows individuals and businesses to sue for damages.
Consult With Our Florida FDUTPA Lawyers Today
At Pike & Lustig, LLP, our Florida FDUTPA attorneys are solutions-driven advocates for our clients. If you have any specific questions or concerns about recovering compensation for deceptive billing practices, we are here to help. Give us a phone call now or send us a direct message to arrange a confidential, no obligation consultation. Our law firm provides FDUTPA representation in Miami, West Palm Beach, Fort Lauderdale, Jupiter, and throughout the surrounding area in South Florida.