Excerpt
UrthBox engaged in offering a supposedly "free" trial without adequately disclosing hidden subscription charges and misrepresenting consumer reviews as independent.
Our analysis
Between October 2016 and November 2017, the UrthBox offered a seemingly "free" trial of its snack boxes online for a nominal shipping fee, failing to adequately disclose key terms on its desktop and mobile websites.
-Unbeknownst to consumers, UrthBox would charge them the total amount for six months of shipments if they failed to cancel in time.
-Furthermore, UrthBox engaged in deceptive practices by misrepresenting positive consumer reviews on platforms like the Better Business Bureau and third-party websites as independent experiences or impartial opinions, even though the reviewers were compensated with free snack boxes in exchange for posting favorable reviews.
These deceptive actions not only violated the FTC Act but also employed deceptive design elements, such as fake social proof and hidden subscription terms, to mislead consumers.
Outcome
UrthBox is prohibited from engaging in similar conduct and is obliged to pay $100,000 to the FTC. Furthermore, in December 2019, the FTC refunded over $84,000 to compensate consumers who were charged after signing up for the trial offer.
Parties
Federal Trade Commission and UrthBox, Inc.
Case number
Docket No. C-4676
Decision
Related deceptive patterns
The fake social proof deceptive pattern creates an illusion of popularity and credibility by presenting users with falsified or exaggerated endorsements, such as reviews, testimonials, or activity messages. This manipulation preys on the social proof cognitive bias, in which which individuals are likely to conform to the behaviour of others. It is a shortcut that allows people to avoid the hard work of carrying out a critical evaluation of their own. By using the fake social proof deceptive pattern, providers can trick users into making a purchase or engaging with their offerings.
The hidden subscription deceptive pattern typically works by employing some form of sneaking or misdirection. Users think they are buying one thing, when in fact there's a hidden legal stipulation that they are in fact signing up to a recurring subscription. Once they have signed up, the service is usually covert and the user is sent no emails or notifications reminding them that they are paying on a recurring basis, so that payments continue for as long as possible. It is also typically paired up with the hard to cancel deceptive pattern.
Related laws
Prohibits deceptive acts or practices that misrepresent or omit material facts.
Requires companies to obtain consumer's consent before charging their credit or debit cards for goods or services offered through a "negative option feature."