FTC Goes After AH Media Group for Fraudulent Subscription Practices
Including deceptive free trial offers and negative option subscriptions
Last week, the Federal Trade Commission got a preliminary injunction against AH Media Group for fraudulent subscription practices, including free trial offers and negative option subscriptions. The preliminary injunction prevents AH Media from misrepresenting their “free trial” offers, enrolling them in subscriptions without permission, billing customers without permission, and making it very difficult for customers to cancel their subscriptions or get refunds.
The FTC alleges the company defrauded U.S. consumers of more than $35 million through illegal credit and debit card charges. The FTC complaint charges AH Media with violating Section 5 of the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA) and the Electronic Fund Transfer Act.
AH Media Group, LLC is owned by Henry Block and Alan Schill. According to the FTC, the company sold beauty and weight loss products under at least eight different brands including AmaBella Allure, Adelina, Parisian Glow and Tone Fire Garcinia. The alleged subscription scam, executed through a series of shell companies, is believed to go back until at least April 2016. The FTC filed its complaint in the U.S. District Court for the Northern District of California against A Media Group, LLC; Henry Block as an individual and an owner of AH Media; Alan Schill, individually and as owner of AH Media; and Zanelo, LLC, controlled by Schill.
“These companies promised ‘free’ trial offers—telling people that they would pay only for shipping and handling—but then enrolled people in a subscription plan, placing big unauthorized charges on their credit cards every month,” said Andrew Smith, Director the FTC’s Bureau of Consumer Protection, in a September 6 news release. “When you sign up for a free trial, but the merchant asks for your credit card for shipping and handling, you should be on-guard. Read the fine print of the offer, pay attention to your credit card statement, and contact your bank if you see any charges that you did not authorize.”
According to the FTC, the defendants used deceptive websites to charge customers for the free trial and an ongoing subscription plan. Customers were only required to pay shipping and handling of $4.99 or less. AH Media failed to clearly and conspicuously provide information about additional terms and conditions where they were easily accessible.
After a two-week trial period, the company allegedly charged consumers approximately $90 for the trial product and enrolled them for a subscription plan which included additional charges. They also used upsell pages to get customers to buy a second product trial and related subscription.
In addition, AH Media made it challenging for unwitting subscribers to cancel their subscriptions. They were not able to do so online. Instead, they had to call a customer service number where they were put on hold. When customers tried to reverse the charges through their credit card companies, AH Media disputed the allegations through fraudulent versions of their websites.
A Google search for AmaBella Allure reveals 169 complaints in 3 years to the St. Petersburg, Florida Better Business Bureau, all with similar complaints to what the FTC reported. Several of the complaints were addressed by AH Media Group directly who apologized and rectified some of the complaints. We found similar results of complaints (131 complaints in 3 years) to the Better Business Bureau when searching for Parisian Glow.
The alleged fraud is estimated at more than $35 million. It is likely that tens of thousands, perhaps hundreds of thousands, of customers were defrauded by AH Media Group and its bad business practices. We have seen these types of complaints before and other governmental bodies have taken action to stop such fraud, even enacting, revising or clarifying their laws going forward. It all goes back to transparency and delivering what you promise to your subscribers. Any “subscription” company that doesn’t do that doesn’t deserve to be in business.