The Florida Attorney General's Office has settled allegations of deceptive marketing practices with XM Brands, which sells nonprescription dietary aids, nutritional supplements, teeth-whitening products, and other products over the Internet.
The settlement resolves issues related to XM's trial offers, automatic subscription renewals, and automatic shipments.
The Attorney General's Economic Crimes Division began investigating XM in December 2009 when consumers complained that they received and were billed for products they did not order. The investigation revealed that acceptance of XM's trial product offer triggered a negative option agreement that imposed automatic monthly shipments and reoccurring costs associated with receiving the trial products.
XM Brands has already reimbursed or assisted in the reimbursement of about $3 million to consumers across the U.S. As part of the settlement, refunds will be offered to Florida consumers who were enrolled in a trial offer, automatic renewal, or automatic shipment plan online. In addition to consumer refunds, the companies will pay about $51,000 to the attorney general's office for attorneys' fees and costs, as well as for future investigation and enforcement.
Going forward, XM has agreed to advertise in a way that clearly and conspicuously tells consumers about the terms and conditions of its plans and ensures that consumers have agreed to automatic renewals and automatic shipments before enrolling them in such programs.
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