The Federal Trade Commission put a stop to an online operation that allegedly lured consumers with a supposedly “free” book falsely promising that it would show them how to power their cars and homes at no cost, and then billed them for an online magazine they never ordered. The defendants behind the alleged scam have agreed to a settlement that requires them to pay almost $2 million for consumer refunds, and permanently bars them from making misleading product claims.
According to the FTC’s complaint against Green Millionaire, 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.”
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 settlement order also prohibits the defendants from using consumers’ billing information to obtain payment without first getting their consent, as well as failing to clearly disclose the terms of any refund or cancellation policy and failing to promptly honor a consumer’s request for a refund or cancellation.
In addition, the order bars the defendants from making any material misrepresentation in the sale of any good or service, including falsely claiming that consumers can get free gas for life, put solar panels on their roofs for free, and make their electricity meter go backward; and from using endorsements and testimonials unless they are true and substantiated. The order also prohibits the defendants from selling or otherwise benefiting from customers’ personal information, and requires them to properly dispose of customers’ personal information within 30 days.
The order imposes a judgment of more than $5.7 million.