Another set of trial program scammers settles with the FTC

Again?!

It's an interesting exercise to put yourself in the shoes of a "risk-free trial" scammer.

Your basic trick is simple: Promise consumers "risk-free" samples, charge them a nominal shipping and handling fee of a few bucks, and once you get their payment information, hit them with a hefty monthly charge.

But can this sort of practice be worth the risk?

We've covered so many alleged instances of these scams that we've lost count (see here, here, here ...). Legislatures and payment processors alike have cracked down on the practice.

So we know that plenty of (alleged) perpetrators get caught. But how many scammers must get away with these switch-ups to inspire others to resurrect them, over and over again?

Following a Template?

We don't know the answer.

But we do have another settlement between alleged risk-free trial scammers and their bête noire, the Federal Trade Commission (FTC), to share with you.

Triangle Media Corp., Jasper Rain Marketing LLC and Brian Phillips are marketers and distributors of skin care products, e-cigarettes and dietary supplements (products that are often featured in shady risk-free offers). The commission sued them in the Southern District of California in June 2018 for allegedly offering deceptive free trials of their products for a small shipping and handling fee (typically $4.95 or less).

Guess what comes next?

According to the FTC, once the defendants had the consumers' credit card numbers, they charged "them as much as $98.71 for a single shipment and enroll[ed] them in a continuity program costing the same amount on a monthly basis." Adding injury to injury, the defendants then allegedly charged the consumers for entirely different products – and enrolled them in a new set of continuity programs.

The Takeaway

The commission added another set of defendants – Hardwire Interactive Inc., Global Northern Trading Ltd. and Devin Keer – in an amended complaint filed in December 2018. These new parties were accused of helping run the scam from outside the United States.

At the end of the day, everyone settled.

The commission's agreement with the first set of defendants prohibits Triangle and company from misrepresenting negative option transactions and orders them to comply with the Restore Online Shoppers' Confidence Act consent and disclosure requirements. The order came with a hefty $48 million judgment, suspended after a $400,000 payment and relinquishment of assets.

The second order settled the Hardwire defendant's charges with the same prohibitions and directives, but added a $123.1 million judgment, suspended after a $3 million payment.

And now, get ready for the next risk-free trial scam settlement in 3 ... 2 ... 1 ...

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