WASHINGTON (Legal Newsline) — The Federal Trade Commission (FTC) announced Sept. 13 that a group of online marketers will pay more than $2.5 million to settle FTC allegations of deceiving consumers with “free’ and “risk-free” trials for cooking and golfing products.
The FTC took action against the defendants with a complaint filed in March. According to the agency, the defendants offered “free” products but did not clearly disclose that the acceptance of the product forced consumers into monthly subscription payments if they did not cancel. The FTC claims that the defendants also misrepresented their return, refund and cancellation policies.
The defendants have been ordered to clearly disclose important details about any online negative option tactics.
The order against Brian Bernheim and Joshua Bernheim involves a four-installment monetary judgment totaling $1,869,690, to be paid throughout one year.
The order against Robert Koch involves a $632,304 payment separated into three installments, also to be paid throughout one year.
The FTC voted 2-0 to approve the proposed stipulated final orders. The orders were filed in the U.S. District Court for the Southern District of California.