FTC and Florida Settle with Chargebacks911 on Deceptive Tactics

Published 5 months ago

The Federal Trade Commission (FTC) and the State of Florida have secured a settlement with Chargebacks911. The settlement bars the chargeback mitigation firm from servicing certain high-risk clients and using deceptive methods to prevent consumers from disputing charges.

Details of the Complaint

The FTC and Florida lodged a complaint in federal court in April, alleging that Chargebacks911 and its owners, Gary Cardone and Monica Eaton Cardone, employed various unfair tactics to obstruct people from successfully contesting chargeback disagreements. The complaint highlighted that the company frequently sent screenshots on behalf of its clients to credit card companies. These screenshots allegedly demonstrated that consumers had consented to the disputed charges, often recurring monthly subscription fees.

It was noted in the complaint that these screenshots were often not from the actual website where the contested purchases were made, and that the company overlooked obvious indicators that the website screenshots were misleading.

Proposed Court Order

The proposed court order, still awaiting approval from a federal judge, would prevent Chargebacks911 from offering chargeback mitigation services to high-risk clients. These clients typically use affiliate marketing and negative option plans to sell specific product types often fraudulently marketed.

The order would also prevent the firm from knowingly using deceptive or misleading information on behalf of their clients. It would further restrict them from using methods such as their Value-Added Promotions service to assist clients in evading fraud-monitoring programmes.

As part of the settlement, the defendants are obligated to pay $100,000 in civil penalties and $50,000 in legal costs to the State of Florida.

Impact on Consumer Protection

The settlement will provide significant safeguards for online shoppers, according to Samuel Levine, director of the FTC Bureau of Consumer Protection. The resolution sends a strong message that chargeback mitigation companies cannot undermine consumers’ ability to exercise their rights, he said.

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