Feds crack down on Internet "free trial" schemes

The Federal Trade Commission is putting the kibosh on companies that bait customers with supposedly free trial officers.

At the agency's request, a federal court has issued a temporary restraining order on several marketing companies that promote green coffee bean extract and other supplements through supposed free-trial, the FTC said Monday.

It is the consumer watchdog's first action against companies accused of violating the so-called Restore Online Shoppers' Confidence Act. The marketing firms allegedly charged consumers without disclosing the terms of the transaction or getting clear consent. The Online Shoppers law is aimed at protecting consumers from unscrupulous Internet marketing. The FTC is hoping to make the ban on such tactics permanent.

The FTC said the firms charged consumers for supplements unless they specifically requested them to stop. That approach, called a "negative option," is often associated with offers that purport to allow people to try a product for free.

Health Formulas (and related companies) and Simple Pure marketed products in a variety of media claiming everything from improved weight loss to muscle building to enhanced virility. Consumers who agreed to try the products found themselves with bills of $60 to $210 a month, the FTC said, and were sometimes charged for additional products that cost up to $60 apiece.

"The defendants behind Simple Pure used nearly every trick in the book to deceive consumers," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "They not only deceived consumers about the effectiveness of their products, but also repeatedly debited consumers' accounts without their approval."

When it comes to free trial offers, the FTC suggests that consumers:

  • Check out the company before placing an order to see whether it has generated complaints.
  • Read the terms and conditions of the deal, even if you have to hunt for them.
  • Find the terms and conditions for the offer. That includes offers online, on TV, in the newspaper or on the radio. If you can't find them or can't understand exactly what you're agreeing to, don't sign up.
  • Beware of boxes on the ordering screen that are already checked, meaning that you have to uncheck them to avoid signing up for something you might not want.
  • Note when your free trial ends and what you need to do to end it.
  • Monitor charges on the credit card used to sign up for a trial so you can spot unauthorized payments.
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    Mitch Lipka is an award-winning consumer columnist. He was in charge of consumer news for AOL's personal finance site and was a senior editor at Consumer Reports. He was also a reporter for The Philadelphia Inquirer and the South Florida Sun-Sentinel, among other publications.