Pact, Inc. settled charges with the FTC on September 21, 2017
that the mobile software application company engaged in deceptive
acts and practices, unfair billing practices, and failure to
disclose material terms relating to its Pact app.
The Pact app is premised on paying members that complete
health-related weekly "pacts" with funds generated by
users that fail to do so. Members set targets and penalty amounts
between five and fifty dollars in case they break the pact. For
example, GymPacts involves committing to exercise a specified
number of times per week and VeggiePacts involves committing to eat
a specified number of fruit and vegetables per week. Pacts
automatically renew on Monday nights, and the app assured consumers
it would never charge them unless they fail to complete a pact.
According to the complaint, Pact, Inc. did not pay consumers
for successfully-completed pacts—and in some cases charged
them—and continuously charged consumers after
cancellation.
