FTC Crackdown on Negative Option Marketing
I found some good news on the negative marketing option front. It’s a bit dated (Feb., 2009) and it specifically addresses only diet pills, but it’s a
What is negative option marketing?
That’s the odor you smell when you read the terms and conditions at such sewers as Google Treasure Chest and Easy Google Cash and [fill in any Google name here]. There are probably thousands of such sites.
Negative option marketing is when you sign up for free x, but you’re also signing up for y and z at the same time. If you don’t cancel y and z after the “free trial period,” your credit/debit card is hit with surprise charges.
The problem is that sometimes you are not told about y and z, and sometimes you are told but not clearly, and sometimes you just don’t read the terms and conditions. (Not “you” you—I’ve Tried That readers are too smart for that. I mean the other “you.”)
So What’s the Good News?
The FTC fined two companies for a total of more than $9,000,000 for their negative option marketing practices. You can read the full source article here, but here is the money quote. This is how the companies attracted the attention of the FTC:
Failing to disclose adequately that consumers who order a “free” sample are enrolled in a continuity program, that their accounts will be debited or charged to pay for the program, that they must cancel to avoid extra shipments and debits and charges, and how and when they must cancel to avoid the debits or charges
Debiting or charging accounts of consumers who cancelled or tried to cancel, or those who were not adequately informed of the negative option features or terms and conditions, and therefore did not provide express informed consent for the debits or charges.
Sound familiar? Those are exactly the complaints of thousands of people who signed up for Google Golden Egg Goose (or whatever). If FTC could smack down these diet pill companies, why not the Google scam guys? I’m speculating, but I think there are several reasons:
- There are thousands of sites, all of which take pains to hide the owners’ identities.
- Many of the sites could be hosted on servers outside the US and owned by citizens of other countries.
- Is there a jurisdictional issue? FTC thinks it’s an FBI Internet Crimes Division problem?
Who knows? But it can only help if people continue to file complaints. If you have been a victim of deceptive negative option marketing, click here to file a complaint with the FTC.
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