Nutra Pills barred from making 'free' offers unless they really are!
By: James Limbach, ConsumerAffairs.com
Attorneys for the state of Colorado have reached a settlement agreement with Nutra Pills, Inc., and its owner, Joshua D. Bezoni, to bring the internet marketer and seller of nutritional supplements, including acai berry supplements, into compliance with state's consumer protection laws.
In addition, consumers who did business with the company over the last year will be reimbursed.
The Office of Attorney General John Suthers says it learned through its investigation that Bezoni's Arvada-Colorado-based company, which has operated under the names Golf Nutrition Sciences and GNS, used so-called "free-to-pay conversion" marketing since 2005, which resulted in consumers unknowingly incurring continuing payments for products that they initially believed were free.
According to court filings, consumers signed up for free trials of products, such as Acai Berry Edge, Acai Berry Elite and Slim Seduction, and believed at the time they placed their order that they were authorizing only the shipping and handling charges for the free trial. When the free trial arrived, however, consumers also received a two-month supply of the product and were given a limited amount of time to return the product or face a nearly $80 charge within 30 days.
That's what happened to Cathy of Locust Grove, OK. She tells ConsumerAffairs.com that she ordered Slim Seduction, which was offered for a free trial period, after which she would be billed $39.90 for each of 2 bottles and pay only $3.97 shipping at time of order.
"After trying the product for about a week and a half, decided it wasn't for me," she says. "Called and received a return authorization and confirmation numbers. Sent product back via USPS with delivery confirmation tracking service. Product was received back at GNS on 3/20/09. My account was billed $79.90 on 3/22/09. I am now in the process of trying to get a hold of someone there to get my account credited."
Additionally, if consumers failed to take any action to cancel their order and send back the two-month supply of product, they were enrolled into the company's "continuity" plan, which meant the company continued to send products to the consumer and charge the consumer nearly $80 for each shipment.
More than one thousand consumers complained that they had no idea they were agreeing to the additional charges associated with the free trial offer and that once they did realize it, it was often too difficult or too late to get a refund from the company.
Sandra of Tucker, GA, found out about that the hard way. She tells us that after receiving a sample product, for which she would be charged shipping only, she called and cancelled any future orders. "The girl told me it was cancelled and assured me I would receive no more product or charges. The next month I received a $79.90 charge on my card and was assured it would be credited (it wasn't). This month I have a $69.90 charge again. They are now $150 ahead and I still don't have any proof that they won't steal another amount next month."
The company generated $40 million in sales in 2009 — nearly all of it a direct result of its free-to-pay conversion sales. Since the attorney general launched the investigation into Nutra Pills one year ago, the company has refunded nearly $9 million dollars to consumers and has ceased doing business.
Under the terms of the settlement, approved by a Jefferson County District Court judge, Bezoni and his businesses will be prohibited from marketing "free" products unless they are, in fact, free and not part of a free-to-pay conversion plan. Bezoni and his businesses also will be barred from enrolling consumers into continuity plans unless the terms of the plan, including the cancellation policy, are clearly and conspicuously disclosed to consumers before they sign up to receive a product and again after the transaction has been completed.
In addition, Bezoni and his businesses must obtain express authorization from consumers for all charges associated with the initial transaction, including future charges, and they must disclose when those charges will be levied. The agreement requires Bezoni and his businesses to allow consumers to cancel in the same manner that they signed up to receive a sample. It also requires Bezoni and his companies to obtain the express authorization every 12 months from consumers already enrolled in a continuity plan to remain enrolled.
Bezoni and Nutra Pills also must pay a $100,000 fine, half of which the Attorney General agreed to suspend for a period of five years barring any violation of the settlement. In addition, Nutra Pills must reimburse all consumer complainants who filed complaints since December 2006 as well as all consumers who requested but were denied refunds since December 2008.
Makers and marketers of acai berry supplements have been under increasing attack, including a salvo launched by Oprah Winfrey .
