These companies generated sales by posting advertisements on Facebook that offered consumers “free jewelry” minus shipping and handling fees. What these advertisements failed to clearly disclose was that, according to the investigation, by accepting the offer for “free jewelry” customers would automatically be enrolled in a membership club. Customers would be billed a monthly recurring membership fee ranging from $19.99 to $25.00 unless and until they cancelled the membership.
“These companies funneled people from Facebook into their subscription clubs based on false promises,” said AG Shapiro. “It is illegal for companies to sign customers up for recurring subscription charges without giving consumers fair notice. Companies who advertise online and on social media should take this as a warning — if you’re breaking the law, my office will find out and do whatever we can to get people their money back.”
According to allegations in the settlement, Arrowmistic, LLC and Cultured Quotes, LLC violated Pennsylvania’s Consumer Protection Law by misrepresenting offers as free to consumers when they were not and failing to disclose to consumers the material terms and conditions of their subscription billing practices.
Under today’s settlements, the companies paid a total of $25,000, to be dispersed to consumers via refunds. In order to be eligible for a refund, consumers have 90 days to file a complaint with with the Bureau of Consumer Protection at https://www.attorneygeneral.gov or by calling 1-800-441-2555.
In addition, the settlements ban the companies from billing any consumer for any membership fee that originated from a promotional offer marketed by the companies from January 1, 2017 through the filing date of the settlement, unless the companies have proof that the consumers adequately consented to be charged.
The settlements were filed in the Allegheny County Court of Common Pleas by Senior Deputy Attorney General Amy L. Schulman of the Pittsburgh Regional Office.
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