Marketing Madness

Risk Free Skin Offer Scam Forced to Refund

Nearly 80,000 consumers who signed up for “risk-free” trial offers for skin care products but were then enrolled in programs with recurring monthly charges without their permission will receive refunds totaling more than $1.8 million, the Federal Trade Commission has announced.

In June 2015, the FTC charged seven individuals and 15 companies with selling Auravie, Dellure, LéOR Skincare, and Miracle Face Kit branded skincare products through deceptive “risk-free trials.” According to the agency, the defendants asked consumers to provide their credit card information to pay shipping fees then used the information to set up unauthorized monthly recurring charges for unordered products.

Orders were entered against Paul Medina, Oz MizrahiMotti NotteaRoi ReuveniAlon NotteaDoron NotteaIgor LatsanovskiCalEnergy, Inc., Adageo, LLC, and Zen Mobile Media, Inc. and the default judgment and order entered against 19 corporate defendants include monetary judgments of more than $72.7 million. The stipulated order judgments are partially suspended based upon the defendants’ abilities to pay. The orders require these defendants to surrender virtually all of their assets to the FTC, totaling over $2.7 million.

The complaints also charged defendants with misrepresenting themselves as being accredited by the Better Business Bureau.

The settlement bars both the individual and corporate defendants involved with the case from future sales of products through a “negative option,” in which the consumer’s silence is interpreted as consent to receive and pay for goods and services. Court orders also bar them from future deception and credit card laundering.

Checks averaging $22.95 will be issued by refund administrator Rust Consulting, Inc. and must be cashed within 60 days. If a consumer believes they lost money to the scheme but has not received a check, they can contact the refund administrator by calling the FTC hotline at 1-877-FTC-HELP (877-382-4357).

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Pesach Lattin

Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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