Updated: 2019, Apr 15

FTC Files Lawsuit Over Fake Free Trial Offered By Skin Care Products

FTC Files Lawsuit Over Fake Free Trial Offered By Skin Care Products

Marketing and promotion is an essential part of any successful business, big or small. While every company is unique in their own way, numerous promotional techniques have been designed by some of the industries and then duplicated by the smaller ventures in the same industries, as well as smaller ventures in other industries. While many of these techniques used by companies are honest, reliable and discloses everything a potential buyer needs to know before entering their confidential information, others would do everything they can to win potential buyers over. This often leads companies to introducing free trial offers to the public – providing the company behind the trial offer with the perfect opportunity to grab the attention of new buyers and turn them into long-term, returning customers.

Free Trial Autoship Programs

When a company needs to attract users to their product quickly, they often rely on a free trial promotion. Free trial offers provide a potential user of a product with an opportunity to gain access to the specific product or service for a certain amount of time without paying for a full supply. Unfortunately, with physical products, these free trial offers often include hidden terms that present themselves in unpleasant ways. With free trial offers for physical products, the trial offer usually isn’t free – a user is still required to pay a certain amount of money for shipping and handling. This automatically invalidates the use of the word “free” in the promotion. These offers also usually only include a supply of the product for a small amount of time – usually only for four to 10 days.
While this may still sound promising to a buyer user, they usually find a hidden unpleasant surprise after the trial offer has expired. Hidden in the terms and conditions of these offers are an autoship program most of the times. These autoship programs automatically subscribes a user to a shipment of whatever product they received a trial of after the trial period has ended, thus resulting in unexpected charges on the buyer’s credit card – sometimes even before they have received the sample product.

FTC Lawsuit

FTC Lawsuit

On the 25th of June 2015, the Federal Trade Commission declared a hold on skincare companies that offers risk free trials on the internet. According to the FTC’s press release, this court request were made due to a large number of skin care companies within California offering trial offers to buyers on the internet and then automatically charging the customer’s credit card once the trial offer has expired. A total of 15 companies that offered skin care products was part of the group that was reported in this case. Some of the skin care products that were offered by these Californian companies included:

  • Dellure
  • LeOR Skincare
  • Miracle Face Kit
  • Auravie

These companies promoted a trial offer to the user that lasted for a total of 10 days. The user was asked to enter their credit card details upon signing up for the trial offer as they were asked to pay a $4.95 shipping and handling fee. Once the user signed up for such a trial offer, their details were added to the company’s recurring billing system – to be charged the full amount for a one-month supply of the specific product as soon as the trial period ended. These amounts averaged a total of $97.88 per user on a monthly basis. The press release goes on to report that the buyers were charged shortly after receiving their sample products – in some cases, before the sample products even arrived at their doorsteps.

FTC Recommendations

FTC Recommendations

With the rise a large number of these trial offers on the internet, it is quite difficult for the FTC to pinpoint each company and to file a report for every new one that rises on the internet. For this reason, the FTC has released a series of tips to help consumers determine the validity of a trial offer before they proceed and get themselves caught in a costly web of problems.
The FTC recommends that, when a user sees a free trial offer they are interested in, they should always start by doing some online research about the company that is offering the trial. This will help them determine if any prior reports have been made about the company. Searching for the product on Google, followed by the word “scam” may also help them determine if any scam reports have been listed regarding the specific trial offer they want to subscribe to.
Other than these tips, the FTC also advises internet users to always read the terms and conditions of a trial offer. They should also look out for checkboxes that are pre-checked as these often also causes the user to fall into a “trap”. Users are also advised to mark the trial’s expiration date on a calendar and to manually cancel their trial before this day comes in order to prevent further chargers. If a user finds a company placing unauthorized charges on their card, they are advised to report the issue to the FTC.

Conclusion

While marketing methods are excellent ways for companies to attract new customers, they might also be unethical at times. Fortunately, the FTC has already started to take action against one group of companies that dealt with their customers in an unethical way – by charging their cards at inappropriate times and by ensuring terms of their trial offers are hidden deep. This all raises a cause for concern among internet shoppers as taking precaution may be the best way to prevent such a dilemma from spreading any further.

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