Firm that sold fake stop-smoking patches settles
Last Updated: Thursday, November 12, 2009 | 2:03 PM ET
CBC News
A Delaware marketing firm that offered free trials of a bogus stop-smoking patch and then illegally debited customers' accounts has settled with the U.S. Federal Trade Commission.
NextClick Media LLC, along with proprietors Kenneth Chan and Albert Chen, were ordered on Tuesday to pay $315,000 US. The company originally faced a $3.4-million US judgment.
According to a complaint filed by the FTC in March 2008, the defendants operated several websites that offered 10-day free trials of various smoking cessation patches sold under the names Nicocure, Stop Smoking 180, and Zero Nicotine.
The websites claimed their herbal smoking cessation patches worked better than nicotine patches and "have a 97 per cent success rate," but the FTC found no substantiation for their claims.
Consumers were lured with claims like this: "Your 10 day trial is absolutely free! Charges will only be made to your credit card if you find that Stop Smoking 180 is the product for you and you choose to continue with the Stop Smoking 180 program for a discounted membership price."
However, the FTC found that consumers weren't sent a 10-day trial size package but instead received a 30-day supply. Consumers were charged for the larger amount and if they returned any unused portion, they paid their own postage, and were charged a restocking fee of $7.95.
The web ads stated consumers would pay only for shipping and handling but the FTC found that customers were automatically enrolled in a continuity program and were billed up to $99.95 per month until they cancelled, none of which was disclosed at the beginning.
Consumers found that cancellation was difficult or impossible.
For example, to cancel, consumers were required to send back any unused portions. To do that, they had to obtain an "RMA" number from the firm, but it was nearly impossible to get an RMA number. Consumers who tried to call customer service usually got a voice message saying the mailbox was full.
The FTC settlement contains record-keeping and reporting provisions to allow the agency to monitor compliance with the order. The full judgment of $3.14 million will become due immediately if the defendants are found to have misrepresented their financial condition.
