FTC Scores Preliminary Injunction Against ‘Free Trial’ Scam, Another Case That Could Test Agency Authorities
The US Federal Trade Commission’s authority to secure permanent injunctions against defendants and obtain penalties for misconduct under FTC Act consumer protection provisions has taken hits in federal appeals courts of late. But for now, it is business as usual for the FTC in California federal court where it just won a preliminary injunction against alleged beauty and dietary supplement “free trial” fraudsters.
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The Miami Beach, FL-based company has dropped the “Organic” from its name but continues to go by Truly after at least four years of marketing skin-care and bath products as “certified organic” when in fact they were neither organic nor certified, according to the Federal Trade Commission.
The Federal Trade Commission is accustomed to seeking permanent injunctions (and monetary penalties) from companies for past violations under Section 13(b) of the FTC Act, which it contends is an invaluable deterrent to bad behavior. However, the Third Circuit says FTC’s interpretation of the section’s provisions is an untenable stretch of statutory language.