FTC Continues Enforcement Actions To Stop Deceptive Free-Trial And Negative Option Schemes

The Federal Trade Commission (“FTC”) recently filed another case in a series of recent enforcement actions targeting allegedly deceptive online “free-trial” offers that tricked consumers into enrolling in negative option plans. The FTC charged Gopalkrishna Pai and eight (8) companies he owns and operates as a common enterprise with violating the FTC Act and the Restore Online Shoppers’ Confidence Act (“ROSCA”) and defrauding consumers tens of millions of dollars. According to the FTC’s complaint, the defendants advertised free trial skin care products for a nominal shipping and handling charge, typically $4.99 or less. The online ads prominently touted “Risk Free” trial offers, with common pitches in the ads stating “RUSH MY FREE TRIAL,” “WAIT, You Qualify for a Risk Free Trial,” and “CLAIM YOUR FREE TRIAL.” The FTC alleges that the defendants failed to disclose that consumers would…

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