The promise of being able to fuel cars for free — and power homes for free, too — proved a powerful lure for consumers who ended up getting sucked into a magazine subscription program and never did get the secret of “free gas for life.”
The Federal Trade Commission announced on Monday that it had halted the company Green Millionaire LLC from duping consumers into signing up for a magazine they didn’t know they had subscribed to and not providing what they promised. The FTC also said it has reached a settlement in the case that will ultimately return nearly $2 million in restitution to consumers as well as bar the companies and individuals associated with Green Millionaire from making such claims in the future.
Victims signed up for what had been pitched to them as a free book that would deliver incredible cost savings to them by them never having to pay for energy again. Among the claims that were used to entice consumers to buy the “Green Millionaire Book” were the promises that you would learn how to get free gas for life, how to put solar panels on your roof for free, and “how to make your electricity meter go backwards, paying you.”
That was bolstered by what the FTC said were such phony testimonials as “I don’t pay for electricity,” as well as “I don’t have car payments, and I don’t pay for fuel.”
Green Millionaire used a so-called negative option, which means consumers who had decided to get an item — in this case, the “free” book — would be charged for other items unless they specifically opted out of a deal they didn’t even realize they had agreed to. Negative options are often associated with trial offers, when consumers think they’re getting to try out something, but instead are subjected to recurring charges until they cancel.
(MORE: The Jobless Generation)
Green Millionaire got consumers’ credit card or bank account information by asking for it to pay a shipping and handling fee. What they didn’t realize was they were also agreeing to either a $29.95 charge for a two-month subscription to an e-magazine or an $89.95 year-long subscription.
All the tactics — the misleading promises, fake testimonials and negative option — were in violation of federal consumer protection laws, the FTC said. The FTC complaint names Green Millionaire, Syndero Inc., Scott Waltz, and Nigel Williams as defendants.
A court order in the case imposes a judgment against the companies and individuals of $5.7 million, with an agreement that, due to their financial conditions, they only have to pay the first $2 million. Syndero must pay $1.35 million, Waltz $600,000, Green Millionaire $20,000 and Williams has to give up the proceeds of the sale of two pieces of land, a mobile home and a BMW.