The Federal Trade Commission announced it is sending payments totaling more than $27.6 million to consumers who were enrolled without their knowledge in billing plans for products marketed to promote weight loss, clear skin, and other healthcare benefits. The refunds will reach 1,215,337 affected consumers between now and December 18, 2025.
According to the FTC's July 2024 complaint, defendants Legion Media, LLC, KP Commerce, LLC, Pinnacle Payments, LLC, Sloan Health Products, LLC, and their principals operated two distinct types of unauthorized billing schemes that defrauded consumers across the country.
In the first scheme, the FTC alleged that defendants defrauded consumers who purchased CBD and Keto-related products by charging them more than the advertised price and enrolling them in continuity plans without their consent. Under these plans, consumers were repeatedly charged for products they never intended or agreed to purchase, creating an ongoing financial burden for unsuspecting buyers.
The second scheme involved a different deceptive practice where consumers paid what they believed was only a small shipping fee for a supposedly free "gift." However, after consumers provided their credit and debit card information to pay the nominal shipping cost, they began incurring recurring unauthorized charges on their payment methods. This bait-and-switch tactic left consumers facing unexpected monthly charges for products they thought they were receiving for free.
The schemes particularly targeted health-conscious consumers seeking weight loss solutions and skincare products, taking advantage of the growing market for CBD and ketogenic diet supplements. The defendants marketed these products through various channels, using deceptive advertising practices to lure consumers into what appeared to be legitimate purchase transactions.
In September 2024, the Commission announced comprehensive settlements that required the defendants to forfeit tens of millions of dollars in assets. The settlement orders also imposed permanent bans on the companies and their principals from engaging in the alleged illegal conduct. Most significantly, the defendants are now permanently prohibited from marketing or selling any product or service using a negative option feature, which allows companies to interpret consumer silence as consent for ongoing charges.
The FTC's enforcement action addresses a widespread problem in e-commerce where companies use deceptive practices to trap consumers in recurring billing arrangements. Negative option billing, when done without proper disclosure and consent, violates federal consumer protection laws and can result in significant financial harm to consumers who struggle to cancel unwanted subscriptions.
Consumers will receive their refunds through two primary methods. Most affected individuals will receive physical checks in the mail, which must be cashed within 90 days as indicated on the check. Other consumers will receive PayPal payments, which must be redeemed within 30 days of receipt. The payment method appears to be determined by the defendants' payment processing records and consumer preferences indicated during their original transactions.
For consumers with questions about their payments, the FTC has established a dedicated support system. Rust Consulting, serving as the refund administrator, can be reached at 866-914-9330. Additionally, the FTC website provides frequently asked questions about the refund process to help consumers understand their rights and the distribution timeline.
The Commission emphasizes that legitimate refunds never require recipients to pay money or provide account information to receive their payments. This warning comes as scammers often attempt to exploit FTC refund announcements by contacting consumers and requesting personal information or upfront fees to process refunds.
To provide transparency about its enforcement efforts, the FTC maintains interactive dashboards for refund data that offer state-by-state breakdowns of refunds in FTC cases. These dashboards allow consumers and stakeholders to track the Commission's consumer protection work across different regions and case types.
The $27.6 million distribution represents a significant portion of the FTC's broader consumer protection efforts. In 2024 alone, FTC actions resulted in more than $339 million in refunds to consumers nationwide, demonstrating the agency's continued focus on holding companies accountable for deceptive practices and ensuring victims receive compensation for their losses.
This case highlights the importance of consumer vigilance when making online purchases, particularly for health and wellness products that are frequently targeted by fraudulent schemes. Consumers should carefully review terms and conditions, watch for unexpected charges on their payment methods, and report suspicious billing practices to the FTC through its consumer complaint database.
The settlement also serves as a warning to other companies engaged in similar practices that the FTC will continue to pursue aggressive enforcement actions against businesses that use deceptive billing practices to harm consumers. The permanent bans on negative option marketing send a clear message that such conduct will result in severe consequences including asset forfeiture and long-term business restrictions.