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“Free” Trials That Cost Consumers More Than $450 Million

By on September 27, 2011
“Free” Trials That Cost Consumers More Than $450 Million

If scammers aren’t preying on those in financial hardship they’re off preying on those with a low self image.

A federal court has recently halted (at the request of the Federal Trade Commission (FTC)) a website and online company that allegedly took more than $450 million from consumers around the world looking for “free” or “risk-free” offers fro weight-loss pills and teeth whiteners.

Jesse Willms, owner of the 10 companies involved in the fraud case, has had his assets frozen until the pending trial.

Apparently Willms and his companies operated under a “negative option” approach of business. What this means is that if a consumer did not cancel or opt out of future services then they would be shipped products and charged without notice. Until the trial they cannot operate under this plan or offer any “free trial” or “bonus” deals.

Back in May of 2011 the FTC originally filed a complaint against Willms for offering “free trials” of various products online, including but not limited to, “acai berry weight-loss pills, teeth whiteners, and health supplements containing resveratrol (the supposedly healthful ingredient in red wine), as well as for a work-at-home scheme, access to government grants, free credit reports, and penny auctions” – Source.

Instead of receiving a free trial customers were charged for the product and a monthly recurring fee of around $79.95 on average.

The defendants named in the FTC complaint are Jesse Willms, Peter Graver, Adam Sechrist, Brett Callister, Carey L. Milne; 1021018 Alberta Ltd., also doing business as Just Think Media, Credit Report America, eDirect Software, WuLongsource, and Wuyi Source; 1016363 Alberta Ltd., also doing business as eDirect Software; 1524948 Alberta Ltd., also doing business as Terra Marketing Group, SwipeBids.com, and SwipeAuctions.com; Circle Media Bids Limited, also doing business as SwipeBids.com, SwipeAuctions.com, and Selloffauctions.com; Coastwest Holdings Ltd.; Farend Services Ltd.; JDW Media LLC; Net Soft Media LLC, also doing business as SwipeBids.com; Sphere Media LLC, also doing business as SwipeBids.com and SwipeAuctions.com; and True Net LLC, also doing business as Selloffauctions.com – Source.

On September 22, 2011 a federal court decided the FTC had produced enough evidence to halt the operation until a trial.

READ  FTC Cracking Down on Scams using “Free” Trail Offers

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