FTC Gets $40 Million Settlement in Alleged Unauthorized Billing Scheme
Defendants who allegedly enrolled consumers, without their knowledge, into continuity plans for products they did not buy will forfeit assets valued at $40 million and be banned from certain conduct.
The Federal Trade Commission (FTC) said in a Tuesday (Sept. 17) press release that a federal court approved settlements that include these requirements, at the FTC’s request, in cases involving defendants who operated four companies that sold or distributed CBD and keto-related products.
The defendants include U.K. resident Harshil Topiwala, Florida resident Kirtan Patel and the three companies they operated — Legion Media, KP Commerce and Pinnacle Payments — as well as Florida resident Manindra Garg and the company he operated called Sloan Health Products.
The FTC’s complaint said the Legion Media defendants operated two types of unauthorized billing scams and participated in business impersonation scams, while the Sloan Health Products defendant worked with Legion Media by shipping products and handling returns while not providing information that would reveal their actual identities, according to the release.
“In addition to imposing monetary judgments, the orders permanently ban all the defendants from the alleged illegal conduct, as well as from debiting money from consumers’ accounts without prior authorization and from credit card laundering,” the release said. “They also require the defendants to turn over or relinquish claims to substantial assets, as set forth in the orders, which will be used to provide refunds to consumers who incurred unauthorized charges from the defendants’ alleged conduct.”
The FTC filed the complaint July 1, saying the unauthorized billing scheme allegedly involved ads for “free” CBD and keto-related products, and the defendants billing many consumers for products they didn’t agree to purchase, signing many up for continuity plans they didn’t want, debiting money from their bank accounts without authorization, and laundering credit card payments.
“These defendants bilked consumers out of millions of dollars by repeatedly charging them for products they never ordered or agreed to purchase,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a July 1 press release. “The FTC is committed to aggressively pursuing companies and individuals involved in these unauthorized billing scams.”
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