$6M FTC Refund Checks Sent to Consumers Tricked Into Auto-Ship Scam

Consumers who were duped by false advertising by Tarr Inc., or an affiliated company, may receive one of 227,995 checks recently mailed out by the Federal Trade Commission (FTC).

Customers of Tarr may receive a check for approximately $26.57 as a part of the $6 million FTC settlement agreement with the online marketing company.

Tarr Inc. reportedly controlled 19 companies to shill various weight loss supplements, muscle building, and skin care products. The FTC complaint alleged that Tarr promoted approximately 40 different products of this type, and all of them failed to work as advertised.

To do so, according to legal action brought by the FTC, the company used fake celebrity endorsements, bogus magazines and news websites. The FTC also alleged that Tarr affiliated companies used fake customer testimonials to trick thousands into buying their products.

Tarr and its affiliate companies, as well as three named individuals, also stand accused of promising consumers would receive “free” or “risk free” trials of their products. However, consumers complained that the company then automatically enrolled them in subscription programs and charged them for products they had not agreed to purchase every month.

The FTC lodged a lawsuit against Tarr and its affiliates in November 2017. In the complaint, the FTC states that consumers paid more than $179 million for products that were falsely advertised. The products themselves, according to the FTC, did not work as promised.

Further, Tarr’s false advertising schemes ran from celebrity endorsement scams, deceptive marketing, and negative-option auto-ship programs labeled as “free trial” offers.

A negative-option auto-ship program is when a company offers a so-called “free trial” to try out a product or service. Tarr allegedly required consumers provide their financial information to take advantage of the offer, then automatically enrolled consumers in the program – deducting money from their account each month.

According to the FTC, consumers who thought they were signing up for a “risk-free” trial ended up paying approximately $87 a month. Consumers, says the FTC, ended up paying hundreds of dollars for a subscription to products they did not want.

Consumers often don’t know that they have been automatically enrolled in a program when they respond to a free-trial offer until their account is charged the following month. Some companies also make it hard for consumers to get a refund or even cancel these subscriptions.

The FTC also accused Tarr of using fake website names to make it appear as if they were associated with legitimate publications, such as Good Housekeeping and Men’s Health. The company went as far as to include fake mastheads for the publications on the fake sites where they directed customers, contends the FTC.

A court order in the litigation imposed a $179 million judgment on Tarr. Tarr and the individuals controlling it and its affiliates, Richard Fowler, Ryan Fowler, and Nathan Martinez, agreed to pay $6.4 million to end the FTC lawsuit.

Under the terms of the settlement, the group is prohibited from engaging in false advertising, including negative-option auto-ship programs, as a part of any business venture in the future.

If you have questions regarding this recent FTC settlement, contact Epiq at 1-877-861-1501.