A company that used television and internet advertising to lure unsuspecting consumers into buying an unwanted magazine subscription has settled with the FCC in a deal that will provide nearly $2M in restitution to its victims. Part of the bait was the promise of free gasoline.
It also promised that its clients would be able to power their homes for free as well. They promised a “free” book that would explain how consumers could take advantage of these savings in energy costs, but what they got instead was charge for an online magazine that was billed to them illegally via a negative option scheme.
FTC explained the scam:
“According to the FTC’s complaint against Green Millionaire, Syndero Inc., Scott Waltz, and Nigel Williams, the defendants marketed a ‘Green Millionaire Book’ in TV and Internet ads. The ads falsely claimed the book would describe ‘how to get free gas for life,’ ‘how to put solar panels on your roof for free,’ and ‘how to make your electricity meter go backwards paying you,’ with phony testimonial statements such as ‘I don’t pay for electricity’ and ‘I don’t have car payments, and I don’t pay for fuel.’
FTC continued, “The Green Millionaire websites allegedly asked consumers to provide their credit card or bank account number to pay a small shipping and handling fee, without clearly disclosing that they would be charged $29.95 for a two-month subscription to an e-magazine, or $89.95 for a one-year subscription. The defendants allegedly violated the FTC Act by failing to disclose the subscription program, that customers would have to cancel it to avoid additional charges, the program’s cost and how to cancel it, and when they must cancel to avoid charges. They also allegedly debited or charged consumers’ bank or credit card accounts without their consent, misrepresented the book’s contents, and used unsubstantiated endorsements.”
The entire judgment against the defendants amounts to $5.7M. The amount beyond about $2M will be suspended unless FTC learns that the defendants haven’t been forthcoming about their true financial situation.