Last month, the Federal Trade Commission (FTC) filed an action against online marketer, Jesse Willms, who allegedly made over $450 million from consumers worldwide. His companies allegedly lured consumers using “free” or “risk-free” offers and then charged them for products or services they did not agree to.

“The defendants used the lure of a “free” offer to open an illegal pipeline to consumers’ credit card and bank account,” said David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection. “Free must really mean free, no matter where the offer is made.”

Willms’ various online endeavors- Alberta Ltd, Just Think Media, Dazzle White, eDirectSoftware, Farend Services Ltd and Wuyi Source- generated large volumes of complaints in a short period of time, which prompted the BBB to review Willms’ companies files for a pattern of complaints.

A complaint pattern remained consistent for his companies, so BBB contacted the appropriate outside agencies (the Competition Bureau in Canada and the FTC in the U.S.) for help. The FTC asked BBB for information concerning the companies, their affiliates, as well as their complaint history.

Since 2008, BBB has processed over 4,000 complaints against the companies. Consumers told BBB they were unaware of monthly charges, had difficulties receiving refunds or never received the products. BBB serving Central and Northern Alberta and BBB serving Los Angeles worked with these consumers and the company to try and resolve any concerns.

In addition to Willms, the FTC also named Brett Callister, Peter Graver, Adam Sechrist and Carey Milne as defendants. 

The action claims that Willms and his various companies used deceptive marketing tactics by offering “free” trials of teeth whitening, acai berry and weight loss supplements. These offers stated consumers would only pay shipping and handling, but they ended up paying monthly subscriptions fees they were unaware of.

Willms also operated a penny auction website. Consumers believe they would receive bonus bids for joining the site However, consumers who provided credit card or banking information were charged $150, recurring monthly fees and bid fees for using the service. Whether or not a consumer won an auction, they were still required to pay for any bids.

“BBB’s goal is to create marketplace trust,” said Kim States, BBB President. “Consumers should be able to trust what they’re reading without looking for the catch.”

To help consumers avoid being lured by trial offers, BBB advises consumers to do the following:

• Read all terms and conditions. Review the information to determine exactly what you’re paying for and how much it will cost. Also, discover any return or exchange and cancellation policies prior to purchase.
• Read your credit card statements. You’ll know right away if you’re being charged for something you didn’t agree to.
• Research the company. Visit www.tucson.bbb.org or search online to see what others are saying about the company, its products and its services.

For more information please visit www.tucson.bbb.org, or call Better Business Bureau of Southern Arizona at (520)888-5353.

BBB of Delaware has received 222 complaints on a company called “BidRack”. This is a “Penny Auction” website that offers an “Online Bidding” atmosphere on many high tech and popular items, including iPods, Kindles, computers, designer items and more.

Online ads for online penny auctions are popping up everywhere, but BBB warns consumers that they should do their research before making any bids.

With penny auctions, typically users set up an account and purchase bids with a debit or credit card. Each bid may cost less than a dollar and are often sold in bundles of 100 or more. Every item in the auction has a countdown clock and as people place bids, the cost of the item goes up and more time is added to the clock. Each bid costs money, and even if you don’t win the product, you still have to pay for those bids placed.

Consumers have reported that when they sign up for the BidRack service, they are under the understanding that it is “Free.” However, upon registration, their credit card is then charged a fee, often around $99. BBB strongly encourages you to read carefully the terms and conditions of any offer.

To date, BBB of Delaware has not received a response from the company on any of the complaints.

To read more about BidRack, or to check out another company, contact us at www.tucson.bbb.org.

Better Business Bureau of Southern Arizona is alerting consumers to Heat Surge LLC, an Ohio-based business that has been peppering the country with misleading advertisements claiming consumers can receive a free heater.

The ads, which have appeared on television, in local publications across the nation, and in national publications, such as Newsweek, claim consumers can receive a free heater if they’re one of the first 17,247 people to call to beat the company’s order deadline.

“The free claims for the product in the ad are false,” said Kim States, BBB President. “The company also states a time sensitive deadline that adds pressure for individuals to act, and many consumers have told BBB that they regret placing that order.”

Complaints regarding service, advertising, product issues, and a host of other concerns have been filed with BBB. Consumers that called for their free heater tell BBB they were shocked to find themselves caught in a sales pitch about materials for the heater case and finishes used and ended up being charged about $300 to $400 hundred dollars.

Use of the word “free” in advertising comes with clear guidelines for businesses and is outlined in BBB’s code of advertising. The word “free” can only be used in advertising when the advertiser is offering an unconditional gift. If there is a cost to receive the free gift, the advertiser must clearly and conspicuously disclose the conditions.

“BBB frowns on deceptive advertising tactics,” States said

The BBB’s National Advertising Division (NAD) reviews national advertising for truthfulness, accuracy and to foster public confidence in the credibility of advertising. BBB’s often cite advertisers for their claims and businesses are asked to substantiate their offers promptly to the BBB. If you have an advertising claim that you’d like the BBB to review, you can send it to info@tucson.bbb.org.