FTC Sues Online Retailer For Misleading Consumers

The Federal Trade Commission (FTC) filed a complaint in the Northern District of Ohio on Wednesday against various online retailers in violation of the Federal Trade Commission Act (FTC Act), the FTC’s Trade Regulation Rule Concerning the Sale of Mail, Internet, or Telephone Order Merchandise (MITOR) for the retailers’ purported “scheme to take consumers’ money in the midst of the current pandemic by deceiving people into thinking that they are ordering urgently-needed cleaning and disinfecting supplies from websites owned by or affiliated with the manufacturers of well-known products.” In actuality, the defendants are not connected to these manufacturers and never deliver the purchased products. Instead, according to the FTC, the retailers “take consumers’ money and disappear.”

Specifically, the FTC averred that since at least July 2020, during the COVID-19 pandemic, the defendants have deceived consumers by selling counterfeit Clorox and Lysol products, while the consumers believed they were purchasing legitimate products from the aforementioned brands. Furthermore, the defendants would allegedly take consumers’ money and not deliver the purchased products. The FTC proffered that the defendants “used internet search engine, social media, and pop-up advertisements to bring consumers to their websites” to order the purported Clorox and Lysol cleaning products, which “have been in high demand due to the COVID-19 pandemic.” Additionally, the FTC noted that the defendants mentioned and took advantage of the COVID-19 pandemic in their marketing and advertising. The FTC claimed that the defendants’ advertisements direct consumers to their websites, which look like they are affiliated with Clorox and/or Lysol, but there is no affiliation.

Furthermore, the FTC alleged that the defendants used various means to trick consumers to think they “access an official or approved website affiliated with the makers of Clorox or Lysol, including using the Lysol or Clorox names and logos on the website homepage and the overall website design.” According to the FTC, consumers only realized that they were not on a legitimate retail website for these products after placing an order and providing payment information. Afterward, the defendants allegedly “immediately charge the consumer.” Additionally, the FTC stated that consumers reported “seeing a wide and inconsistent variety of charging descriptors on their statements when these charges are processed,” but consumers have never received any products after providing their payment information. Consequently, the FTC claimed that the defendants have deceived thousands of consumers, who never received any items for their orders. The FTC reiterated that the defendants “are not part of, affiliated with, or authorized to sell products on behalf of” the makers of Clorox or Lysol. As a result, the defendants are not “authorized to use the names, logos, or any other protected content of these well-known businesses.” Moreover, the FTC proffered that the defendants initiated various sales and specials to entice consumers to purchase these counterfeit items.

The FTC Act “prohibits unfair or deceptive acts or practices in or affecting commerce.” MITOR “requires mail-, Internet-, or telephone-based sellers to have a reasonable basis for advertised shipping times, and, when sellers cannot meet promised shipping times, or in the absence of any promised shipping time, ship within 30 days, to provide buyers with the option to consent to a delay in shipping or to cancel their orders and receive a prompt refund.” The FTC claimed that consumers have reported either: “(a) never hearing from Defendants again, even after attempting to check on their orders by email and/or telephone, (b) receiving communications from Defendants with falsified or fictitious delivery information about a purported shipment that never arrives, or (c) receiving some shipment from Defendants of a worthless product that the consumer did not order, such as a pair of socks.” According to the complaint, consumers also reported that when they attempted to check on an order status, they found that the defendants’ website no longer existed. According to the FTC, consumers also never received requested refunds. As a result, the FTC claimed that this purported conduct violates the FTC Act and MITOR.

The FTC stated that the defendants’ have concealed their true identities and provided a false mailing address to consumers on their websites. Additionally, the FTC knows about at least 25 of the defendants’ websites. However, the FTC added that the defendants “continued to perpetrate their scheme using new websites with different URLs but essentially the same design, format, and content.”  Consequently, the FTC contended that consumers have been harmed by the defendants’ conduct.

The FTC has sought a permanent injunction, equitable relief, an award for costs and fees, and other relief. The FTC is represented by its own counsel.