United States Federal Trade Commission Goes After Online Fraud

FTC Halts Online Marketers Responsible for Deceptive “Free Trial” Offers

A federal district court has granted the Federal Trade Commission’s request to stop a group of San Diego-based Internet marketers from deceptively advertising free trial offers and not only charging consumers full-price for the trial product, but also enrolling them in expensive, ongoing continuity plans without their knowledge or consent. The court order announced today temporarily halts the operation, freezes its assets, and appoints a temporary receiver over the business.

According to the FTC’s complaint:

The defendants market and sell a variety of products online, including skin creams, electronic cigarettes, and dietary supplements. Advertising through third-party websites, blog posts, and surveys, the defendants allegedly offer consumers “RISK FREE” trials of products such as “Wrinkle Rewind,” “Erase Repair H/A,” “Pro Vapor,” “Cerebral X,” “Test X Core,” and “Garcinia Clean XT.”

Consumers who click on these advertisements are taken to the defendants’ websites, which, the complaint alleges, claim to offer trials of these products for just the cost of shipping, which is typically $4.95 or less. The complaint states, however, that consumers who order the free trial wind up being charged as much as $98.71 for the trial shipment, and are also enrolled in a negative-option continuity plan without their consent under which they receive an additional shipment each month and are charged full price for each shipment.

In addition, the FTC alleges the defendants use deceptive order confirmation pages to trick consumers into ordering additional products, for which the defendants similarly charge consumers full price and enroll them in negative-option plans. The defendants then make it difficult to cancel the continuity plan, stop or avoid the recurring charges, or obtain a refund.

Through these allegedly deceptive trial offers, the defendants have made tens of millions of dollars, the FTC contends. The defendants named in the FTC’s complaint are Triangle Media Corporation, Jasper Rain Marketing LLC, Hardwire Interactive Inc., and Brian Phillips, who the FTC alleges owns and operates Triangle Media Corporation.

The complaint charges the defendants with violating the FTC Act, the Restore Online Shoppers’ Confidence Act, and the Electronic Fund Transfer Act and its implementing Regulation E. The FTC is seeking an injunction permanently barring the defendants from such practices in the future.

The Commission thanks the following agencies organizations for their collaboration and contributions to this case: the United States Postal Inspection Service, the Nevada Attorney General’s Office, the San Diego County District Attorney’s Office, the Better Business Bureau of Eastern & Southwest Missouri & Southern Illinois, the Better Business Bureau of Denver & Boulder, the Better Business Bureau of Detroit & Eastern Michigan and the Better Business Bureau of Southern Nevada.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Southern District of California, and the court granted the FTC a temporary restraining order against the defendants on June 28, 2018.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook(link is external), follow us on Twitter(link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.

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