- Defendants Allegedly Participated in Unauthorized Billing Scheme Involving CBD and Keto-Related Products
July 02, 2024
Tampa, FL (Highpoint Digesrt) − Monday, A U.S. district court in central Florida unsealed a Federal Trade Commission complaint charging two related groups of defendants with defrauding consumers nationwide by enrolling them, without their knowledge, into continuity plans where they are shipped and charged repeatedly for personal care products that they did not agree to purchase.
The defendants allegedly deceived consumers with ads for “free” CBD and Keto-related personal care products, billing many for products they did not consent to purchase, signing many up for unwanted continuity plans, and debiting money from their bank accounts without prior authorization. In addition, the FTC alleges that some of the defendants laundered credit card payments by setting up bank accounts for shell companies using straw signers.
“These defendants bilked consumers out of millions of dollars by repeatedly charging them for products they never ordered or agreed to purchase,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to aggressively pursuing companies and individuals involved in these unauthorized billing scams.”
The FTC’s complaint names two related groups as defendants: 1) U.K. resident Harshil Topiwala, Florida resident Kirtan Patel, and the three companies they operate, Legion Media, LLC, KP Commerce, LLC, and Pinnacle Payments, LLC; and 2) Florida resident Manindra Garg and a company he operates, Sloan Health Products, LLC.
According to the complaint, the Legion Media defendants have operated two types of unauthorized billing scams. In the first, the defendants market products that supposedly promote weight loss, clear skin, or other health benefits. They then defraud consumers who bought the products by charging them more than the advertised price and enrolling them in continuity plans without their consent in which they are charged for products they never intended or agreed to buy.
The Legion Media defendants also allegedly participated in business impersonation scams where consumers received communications appearing to be from known businesses inviting them to pay a small shipping fee for a supposedly free “gift” online. However, after consumers used their credit and debit cards to pay a fee, they incurred recurring unauthorized charges on their cards. The Legion Media defendants facilitated the scams by securing numerous merchant accounts using shell entities to process the unauthorized online charges.
The FTC alleges Sloan Health worked together with Legion Media by labeling and shipping the deceptively marketed personal care products and handling the large volume of customer returns. The complaint states they shared in the profits of the scheme and distributed the products without providing any information that would reveal their identity to consumers, using only the generic name “Fulfillment Center” and a post office box address in Smyrna, Tennessee.
Based on these allegations, the Commission’s eight-count complaint charges the defendants with violating Section 5 of the FTC Act for misrepresenting that consumers will get free products with their purchases, unfairly charging consumers without their consent, credit card laundering, and business impersonation.
Finally, one count alleges violations of the Electronic Funds Transfer Act for debiting from consumers’ bank accounts without their consent. Each count names all defendants, except the unfair credit card laundering and business impersonation counts, which only name the Legion Media defendants.
Source: FTC
Image courtesy of FTC
