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ARTICLE · 19 APRIL 2017

Retail Practices Are In Vogue For Regulators, And Class Action Lawyers

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The Federal Trade Commission (FTC), state regulators, and plaintiffs' lawyers are focusing on retail and direct-to-consumer practices ranging from membership and subscription plans to discount pricing...

United StatesLitigation, Mediation & Arbitration
Davis+Gilbert LLP
Davis+Gilbert LLP
Louis DiLorenzo
Louis DiLorenzo
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The Federal Trade Commission (FTC), state regulators, and plaintiffs' lawyers are focusing on retail and direct-to-consumer practices ranging from membership and subscription plans to discount pricing and other retail practices.

For example, last August, the FTC settled with I Works and various related individual and corporate defendants for over $280 million in suspended judgments. The FTC alleged that the defendants had enrolled consumers in supposed "trial memberships" for bogus money-making and government grant opportunities, and then proceeded to charge them up to $59.95 in recurring fees for additional programs that the consumers had not agreed to purchase.

The Washington Attorney General similarly settled with a cosmetics startup over allegations that the startup had offered consumers a "free" welcome box, but had not adequately disclosed that consumers would be enrolled in subscription plans for between $19.99 and $24.99 per month after enrollment.

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