Security & Fraud

Consumers Duped By ‘Risk-Free Trials’ To Get $8.7M In Refunds From FTC

The Federal Trade Commission (FTC) is sending out over $8.7 million in refunds to 187,425 customers who were reportedly signed up for non-consensual payment plans with San Diego’s Triangle Media Corporation, according to a press release.

Triangle, along with other defendants in the FTC’s case, was marketing items online, such as skin creams, electronic cigarettes, and dietary supplements, according to the release. They offered trials to customers, but then many customers were reportedly charged full price and unknowingly signed up for expensive plans, the release states.

Triangle and the other defendants made use of blogs, third-party websites and surveys to get people interested in the products, promising free trials. But after a short trial period, the FTC said in the release, customers were charged up to $98.71 for the full product and then signed up for a costly continuing negative option plan.

The defendants reportedly achieved that through deceptive order confirmation pages.

The order from the FTC will now bar Triangle and the other defendants from engaging in these deceptive practices in the future and force them to turn over $9 million in assets. That money will be used for the refunds, the press release states.

The checks will have to be deposited or cashed within 60 days, the FTC said in the release. The average check will be around $47.

In related news, the FTC has released state data for complaints related to the pandemic, finding that the vast majority involved attempts at fraud.

The pandemic had an effect on subscription-based services, with people stuck inside and spending more time online during lockdown periods earlier this year. There are 47 million more subscriptions purported to be logged for video streaming services through the end of the year, for example.

But subscriptions are being used for other things, too — without physical coffee shops, many consumers turned to online subscriptions like Trade Coffee to get coffee sent to their doorsteps regularly during the lockdowns.

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New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.

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