FTC Obtains Court Order Against Skincare Marketers

The Federal Trade Commission has announced that two remaining defendants from a group of California-based marketers have been permanently barred from the alleged deceptive marketing and billing tactics they utilized in connection with selling skincare products with purported “risk-free” trials.

The original complaint was filed in June 2015 against seven individuals and fifteen companies, and alleged that the defendants convinced consumers to provide their credit or debit card information for nominal shipping fees. The FTC alleged that the defendants used consumers’ credit or debit card information to place unauthorized recurring monthly charges for unwanted products.

Charges included violations of the FTC Act, the Restore Online Shoppers’ Confidence Act and the Electronic Fund Transfer Act. Additional individuals, corporate and relief defendants were subsequently named in amended complaint.

Numerous stipulated orders and default judgments have previously been entered. The proposed court settlement announced last week resolve the agency’s claims against the remaining two defendants, one of which the FTC alleges to have owned and controlled companies that were part of the scheme, and to have provided services to help continue the skincare marketers’ unauthorized billing practices.

The order bars the settling defendants from engaging in deceptive practices in connection with the promotion or sale of any good or service, including failing to disclose clearly and conspicuously material terms of offers, failing to obtain a consumer’s express informed consent before submitting billing information for payment, and violating FTC’s Telemarketing Sales Rule (TSR).

It also imposes a $320,665.89 judgment, which is partially suspended based upon an inability to pay. As is the norm for partially suspended judgments, the full judgment will become due if a court later finds the settling defendants misrepresented their financial condition.