FTC Cracks Down on Deceptive 'Free Trial' Scams, Secures $359 Million Settlement

In one of the largest enforcement actions targeting online fraud, the Federal Trade Commission (“FTC”) has successfully shut down a massive international scheme that deceived millions of consumers with bogus "free" trial offers. The case, which involved Jesse Willms and his associated companies, highlights the dangers of negative-option marketing—a practice where companies interpret consumers' silence or lack of action as consent to continue charging them for unwanted goods and services. The FTC’s investigation revealed that Willms and his companies used deceptive online marketing tactics to lure consumers into what appeared to be free trial offers for various products, including weight-loss pills, teeth whiteners, health supplements, and work-at-home schemes. However, these so-called “free” trials often came with hidden fees. Consumers who signed up for these offers unknowingly found themselves enrolled in recurring monthly charges, sometimes as high as $79.95 per month, along with additional charges for "bonus" products they didn’t agree to purchase. In total, nearly four million people were affected by the scam, and the amount fraudulently collected exceeded $359 million. In addition to misleading claims about "free" trials, the defendants also misrepresented the terms and conditions of the offers, including the refund policies. The scheme relied heavily on affiliate marketers who used pop-up ads, unsolicited emails, and other tactics to drive consumers to Willms’ websites. For each consumer who was successfully charged, the affiliates were paid commissions, creating an incentive for them to promote the deceptive offers.