Posts Tagged: Negative Option

FTC 2017: Consumer Protection Year in Review (aka. If you do it, we’ll catch you)

The FTC put out its consumer protection year in review providing a comprehensive list of significant consumer protection developments in 2017.  Let us indulge you with a recap of a few illustrative actions affecting the promotion world.

“Free” Samples

In October 2017, the FTC charged A1 Janitorial Supply Corp. with deceptively calling businesses offering a “free” sample of its cleaning products and then billing them for the samples after shipping.  Hoping that one hand wouldn’t wash the other, the company shipped the goods to one employee (who received the telephone call) but then sent the invoice to another employee.  The FTC alleged that this practice violated the Telemarketing Sales Rule, 16 CFR Part 310 and the Unordered Merchandise Statute, 39 U.S.C. § 3009.  A TRO was entered and the case is still pending.

The lesson:  To stay squeaky clean, remember free means free even when it’s B2B. (more…)

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There’s No Such Thing as a “Free” Sample: FTC Provides Guidance on Advertising “Free” Samples Combined with Recurring Charges

On Tuesday (September 20, 2016), the FTC and Nutraclick entered into a consent order concerning Nutraclick’s online offer for “free” samples of supplements and beauty products. The FTC alleged that Nutraclick failed to clearly disclose to people who requested the samples that they would be enrolled in a membership program and billed up to $79.99 per month, unless they canceled within an 18-day trial period. While this promotional offer may have netted significant profits, its success was short-lived when at least 70,000 filed complaints prompting the FTC investigation.

The FTC alleged violations of the FTC Act’s prohibition against unfair or deceptive acts or practices (15 U.S.C. §45(a)) and the Restore Online Shoppers’ Confidence Act, which pertains to selling online through a negative option feature, i.e., where a consumer’s silence is interpreted as an acceptance of the offer. 15 U.S.C. §8403.

The Promotion (According to the FTC Complaint): (more…)

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