Part 1: “Free Trial” Scams and The Main Operator Behind Them

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For starters, selling a product on a “free trial” basis is not illegal within itself, however the “free trial” operator that we are investigating appears to have put together a complex scheme to deceptively advertise a range of products that obscure the terms of sale.

Tens of thousands of consumers have claimed that they unknowingly subscribed to recurring fees on a monthly basis for health and beauty supplements that they thought were free of charge, minus shipping fees in the $4.95 range.  Instead consumers claim that they were billed without their consent and had a very difficult time cancelling the charges, with long wait times and other challenges in the process of receiving refunds.  And all orders trace back to this operator’s business address.

The underpinnings of this scam boils down to the structure of the Visa/Mastercard merchant processing by the operator we are investigating, along with the multiple points of profit that the operator behind these schemes put in place in order to reap the rewards with ostensibly limited to no liability.   The schemes involve the registering of hundreds of merchant accounts in the names of individuals that are misled as to the true use of the merchant accounts, along with banks that receive applications with websites that are simply “fronts” to get more merchant accounts to get used to keep chargeback hard counts and percentages below the Visa/Mastercard fraud thresholds.