In a major crackdown on unauthorized billing scams, defendants accused of enrolling consumers into continuity plans for products they never purchased will forfeit assets worth $40 million and face a permanent ban from engaging in certain types of conduct. This settlement was announced by the Federal Trade Commission (FTC) following the approval of court orders requested by the agency.
Court-Approved Settlements and Defendants
The FTC revealed in a press release on Tuesday (Sept. 17) that a federal court had approved settlements in cases involving defendants who operated four companies that marketed and sold CBD and keto-related products. The named defendants include Harshil Topiwala, a resident of the United Kingdom, Kirtan Patel, a Florida resident, and the companies they operated: Legion Media, KP Commerce, and Pinnacle Payments. Also named was Manindra Garg, another Florida resident, along with the company he ran, Sloan Health Products.
These defendants were accused of orchestrating unauthorized billing scams that enrolled consumers, without their consent, into ongoing continuity plans. The FTC’s complaint also accused them of distributing products consumers never agreed to purchase and engaging in business impersonation schemes.
Details of the Unauthorized Billing Scheme
According to the FTC’s complaint, the Legion Media defendants conducted two different unauthorized billing scams, enrolling consumers into continuity programs for products they had not agreed to purchase. Additionally, Sloan Health Products worked with Legion Media by shipping products and managing returns while concealing the identities of those involved.
In these schemes, ads for “free” CBD and keto-related products were used to lure consumers into sharing their payment information. Unbeknownst to them, they were later billed for products they did not order and enrolled into subscription programs without their consent. Furthermore, the defendants debited money from consumers’ bank accounts without prior authorization and laundered credit card payments, adding another layer to their illegal operations.
Permanent Ban and Asset Forfeiture
The court’s orders impose several restrictions on the defendants to prevent further fraudulent activities. They are permanently banned from engaging in any of the illegal conduct alleged in the complaint, as well as from debiting money from consumers’ accounts without prior authorization and laundering credit card payments.
In addition to these bans, the defendants must turn over substantial assets valued at $40 million. These funds will be used to provide refunds to consumers who were charged without authorization as part of the defendants’ alleged schemes.
FTC’s Commitment to Consumer Protection
The FTC initially filed the complaint on July 1, highlighting the severity of the alleged scams. Samuel Levine, director of the FTC’s Bureau of Consumer Protection, expressed the agency’s commitment to tackling such unauthorized billing scams. “These defendants bilked consumers out of millions of dollars by repeatedly charging them for products they never ordered or agreed to purchase,” Levine said in the press release. “The FTC is committed to aggressively pursuing companies and individuals involved in these unauthorized billing scams.”
The settlement and the subsequent penalties reflect the FTC’s ongoing efforts to protect consumers from deceptive practices in the marketplace. By holding these individuals and companies accountable, the FTC aims to deter similar fraudulent activities in the future.
Conclusion
The case against these defendants serves as a warning to companies engaging in unauthorized billing schemes. With the court-approved settlements, the defendants will face lasting consequences, including a $40 million forfeiture and permanent bans from engaging in certain activities. The FTC’s actions underscore its dedication to safeguarding consumer rights and ensuring that those who exploit consumers face the full extent of the law.
The assets seized from the defendants will go towards providing refunds to consumers who were affected by these deceptive practices, highlighting a positive outcome for those who fell victim to the scheme.