They must disclose clearly and conspicuously all material terms and conditions of membership in continuity programs before enrolling consumers, and they are prohibited from misrepresenting any fact material to a consumer’s purchasing decision. The stipulated order, which requires court approval, requires Mantra and Francis to obtain consumers’ informed consent before causing their billing information to be submitted for payment. continued to ship unordered merchandise and to seek payment for the merchandise, even after they had actual knowledge that the FTC had determined that these practices are deceptive, unfair, and unlawful based on prior cease and desist orders against other companies.shipped unordered merchandise to consumers and sent communications seeking payment for the unordered merchandise and.debited consumers’ checking accounts on a recurring basis without obtaining consumers’ written authorization for preauthorized electronic fund transfers from the accounts, as required by the EFTA.caused charges to be submitted for payment for video/DVD shipments without the express informed consent of consumers.misrepresented that consumers can cancel their continuity program membership at any time.failed to disclose adequately that the purchase of a video/DVD results in enrollment in a continuity program and the material terms and conditions of that program.Specifically, the FTC charged that the defendants: The complaint also charged them with violating previous Commission rulings that shipping unordered merchandise and sending communications that seek to obtain payment for, or return of, merchandise shipped without the express consent of the recipient are unfair and deceptive acts or practices. The Commission’s complaint specifically charged Mantra and Francis with violating the FTC Act, the Electronic Fund Transfer Act (EFTA), and the Unordered Merchandise Statute. The FTC contended that the defendants’ advertising did not tell consumers how the continuity programs operated, failed to obtain consumers’ express consent to be enrolled, and did not give consumers an effective means to cancel their memberships once they were enrolled. Once consumers were enrolled in these programs, each month the defendants shipped additional, unordered videos and DVDs on a “negative-option” basis, charging consumers’ credit and debit cards for each shipment until consumers took action to stop the shipments. Mantra’s Alleged Business PracticesĪccording to the FTC, beginning in December 2000, the defendants enrolled consumers who responded to Internet and television ads advertising a single video or DVD into “continuity” programs. and its sole shareholder, officer, and director Joseph R. The order settles the FTC’s charges against the defendants, Mantra Films, Inc. The order prohibits the defendants from engaging in such conduct in the future. The defendants did not tell consumers clearly how the continuity programs operated, enrolled them without their consent, and automatically charged their debit or credit cards without their authorization for each of the unordered monthly shipments. Department of Justice filed on behalf of the FTC in late 2003.Īccording to the FTC, the defendants marketed ‘Girls Gone Wild’ DVDs and videos as part of continuity programs that resulted in monthly shipments of DVDs or videos to consumers who did not agree to receive them. Under the terms of a stipulated court order announced today, the sellers of ‘Girls Gone Wild’ DVDs and videos will pay nearly $1.1 million as combined consumer redress and a civil penalty and will be barred from a wide range of activities detailed in a complaint the U.S.

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