FTC Issues Refund Checks to Victims of Online Subscription Scams

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This month, the Federal Trade Commission has announced that it will be issuing thousands of refund checks to consumers who were harmed by online scams. If you were charged for online magazines you never ordered or if you were charged a monthly fee after applying for a payday loan online, you could be eligible for a refund.

“Free” Green Millionaire Books

The FTC is mailing 58,234 refund checks to consumers who ordered a “free” book that explained how to power homes and cars at no cost, and who were subsequently billed for unwanted online magazine subscriptions.

According to the FTC lawsuit, Green Millionaire, Syndero Inc., Scott Waltz and Nigel Williams marketed a “Green Millionaire Book” on television and online. This “free” book would purportedly inform consumers about how to get free gas for life, how to make electricity meters run backwards, and how to install solar panels on homes for free. These ads reportedly featured false testimonials that boasted statements such as, “I don’t pay for electricity” and “I don’t have car payments, and I don’t pay for fuel.”

Consumers who wished to receive the Green Millionaire Book would be asked to provide their credit card or credit card number to process a shipping and handling fee. However, customers were allegedly not clearly informed that they would be charged $29.95 for a two-month subscription or $89.95 for a one-year subscription to an online magazine.

The defendants behind this alleged subscription scam have agreed to a settlement with the FTC. Under the terms of this settlement, Green Millionaire LLC will pay nearly $2 million in consumer refunds. The settlement also permanently prohibits them from making misleading claims about their products.

This Green Millionaire settlement is part of the FTC’s effort to combat online marketing fraud. The settlement prohibits the defendants from misleading consumers regarding offers of “negative-option” marketing. In negative-option marketing, sellers interpret a consumer’s inaction as permission to charge them.

Eligible consumers are expected to receive a payment of about $33.88.

Direct Benefits Group Payday Loans

The FTC has also announced that it is mailing 64,607 refund checks to consumers who were charged a monthly fee after applying for a payday loan online. Direct Benefits Group did not make it clear that consumers who applied for a payday loan through their website would be charged for enrollment in unrelated services and programs, the FTC alleged.

According to the FTC lawsuit, Direct Benefits Group’s websites asked consumers to provide personal and financial information when they applied for a payday loan. The requested information allegedly included Social Security numbers, drivers’ license numbers, and bank account numbers. Before consumers submitted their application form, they were offered unrelated services such as discount programs for food, travel and merchandise, or for long distance calls and Internet access.

Many consumers did not notice the program offers, and others who declined the offers were still charged for the programs. Consumers were charged up to $59.90 per month for these services, the FTC said. A federal judge found that the defendants illegally took money from consumers’ bank accounts when they visited the websites to get payday loans.

If you get a Direct Benefits Group refund check you have until Nov. 17, 2015 to cash it.

UPDATE: On Oct. 4, 2016, the Federal Trade Commission announced that it will be mailing a second round of checks to consumers who were charged a monthly fee after they applied for a payday loan online using a website operated by certain defendants.