The Federal Trade Commission on March 23 charged in federal court that an intertwined group of Vista-based companies are hoodwinking consumers through an allegedly deceptive technique called negative option marketing. The defendants are AAFE Products, JBE International, BSDC, KADC, Purestrike, BNRI, and individuals Brian Bernheim, Joshua Bernheim, Jared Coates, and Robert Koch.
In recent years, the various companies have sold kitchen and golf products through websites using a dubious technique called "negative option marketing," says the commission. The companies use two kinds of negative option marketing: 1) Billing a consumer's credit card for goods or services on a recurring basis until the consumer cancels the plan; and 2) Making trial offers in which consumers receive goods or services for free or a nominal fee, but the companies charge them when the trial period ends if the consumer fails to return the product or cancel the plan. Often, both techniques are combined.
The suit charges that in numerous instances, these companies: 1) Fail to obtain consumers' express consent before charging their credit card accounts; 2) Tell a fib when claiming that consumers can receive trial shipments for free or for a nominal shipping fee; 3) Do not adequately disclose the offer's terms; and 4) Make it difficult to return trial products and obtain refunds.