FTC bans marketer from negative-option sales

The Federal Trade Commission has obtained a settlement order banning from negative-option sales the ringleader of an operation that lured people into an expensive negative-option scam using a low-cost “trial” offer for tooth whiteners and other products. The settlement order is one of three orders resolving FTC charges against Blair McNea, Jennifer Johnson, Danielle Foss and 59 corporate defendants. The defendants’ deceptive claims, hidden disclosures and confusing terms tricked people into providing their billing information, supposedly to pay shipping and a nominal cost for a trial product. They charged consumers for two ongoing subscriptions to nearly identical products until the consumers canceled. As a result, consumers who believed they had agreed to buy a single trial product for about $5 were charged about $200 a month until they canceled both unauthorized subscriptions.

The orders impose a judgment of $92,011,601, which represents the amount consumers lost to the scam. The remaining portion of the judgment will be suspended upon the surrender of the defendants’ assets, including money, vehicles, and proceeds from the sale of two homes.