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A Canadian con artist who made hundreds of millions of dollars selling worthless products on the Internet will need to look for a new line of work.
Jesse Willms of Alberta, Canada agreed today to settle a variety of false and deceptive marketing charges brought by the Federal Trade Commission.
The FTC alleges Willms and his business partners used “Free Trial Offers” to get people’s credit or debit card numbers in order to bill them for products and services they did not want and did not agree to purchase.
Willms sold dozens of products via the “free trial offer” come-on, including:
- AcaiBurn weight loss products
- PureCleanse colon cleaners
- DazzelWhite and DazzleSmile teeth whiteners
He also marketed work-at-home-schemes, free credit reports, access to government grants, online consumer research services and penny auction sites (SwipeBids.com and SwipeAuctions.com).
In its complaint, the government says these “illegal practices” raked in more than $359 million dollars since 2007 from nearly four million consumers in the U.S., Canada, United Kingdom, Australia and New Zealand.
In settling with the FTC, Willms and his 11 companies are permanently barred from using negative-option marketing, a practice where the seller considers the lack of a response from the customer as permission to charge them.
They are also prohibited from debiting people’s bank accounts without getting their express authorization, making misleading or unsubstantiated health claims and using false or deceptive endorsements or testimonials.
In settling with the FTC, Jesse Willms and his 11 companies are permanently barred from using negative-option marketing, a practice where the seller considers the lack of a response from the customer as permission to charge them.
A judgment of $359 million will be suspended if Willms surrenders the money in his bank accounts, along with the proceeds from the sale of his house, personal property (including a Cadillac Escalade, fur coat and artwork) and corporate assets.
The pitch for everything was basically the same: the product or service was available for “free” or on a “risk-free” trial basis as long as you paid a small fee for shipping and handling.
“Get Your Risk-Free Bottle Today,” the bold print would say. “We’ll let you try it, before you buy it!” Buried in the fine print in the terms and conditions was the fact that you were going to be charged almost immediately.
“If you didn’t return the free sample within a very short period of time, normally 14 days from the date of purchase, you were not only charged each month going forward, but you were charged for the sample you got that was supposed to be free,” explains Robert Schroeder, director of the FTC’s Seattle regional office which handled this case.
Ruth Witteried of Vancouver, Wash., is one Willms’ many victims. She saw an online ad for a “free trial” of a weight loss product called PureCleansePro. Because the ad was on a reputable website, she figured it must be legit. So she agreed to subscribe to a newsletter and pay for the shipping.
When her next credit card bill came, Witteried found charges for more than $166, including $59.95 for the PureCleansePro, membership to an acai berry support site and a web access fee. There were more unauthorized charges on her next statement.
“There wasn’t anything free about it,” she says.
The ad promised a money-back guarantee. But when Witteried called customer service, she couldn’t get the charges reversed.
“They were not nice. They were not helpful,” she remembers. “They said they were not allowed to give refunds.”
Other dishonest sales tactics
The FTC complaint says Willms and his companies made “false and unsubstantiated” product claims and used “false celebrity endorsements.”
Ads for the company’s weight loss products promised rapid and substantial weight loss. Colon cleaning supplements were touted as a way to help prevent colon cancer. In its complaint, the FTC says these claims were “false, misleading, or were not substantiated.”
For some health-related products, Willms put bogus endorsements by Oprah Winfrey and Rachel Ray on his website. But neither of these celebrities endorsed any of his products. In fact, Oprah sued Willms for unauthorized use of her name and likeness.
The bottom line
I warned before about “free trial” or “risk free” offers. They’re designed to make you think you’re getting something for nothing. But if you’re required to hand over your credit or debit card number, for whatever reason, you could be in for a nasty surprise.
The Willms organization isn’t the only company that’s used this marketing trick to scam people. He was the largest fish caught by the feds so far, but there are others still out there.
Before you take the bait, ask yourself – is it really worth the potential hassle to get a little sample of an unknown product from a company you’ve never dealt with before? I think you know the answer.
More Information:
FTC: “Free Trials” Aren’t Always Free
Leave a Comment:
"stupid people with credit cards make not so stupid man filthy rich, details at 11"
free = scam on the internet. The sooner people get this, the sooner this stuff doesnt happen.
It's too bad that I don't see anywhere on here that he's going to serve any PRISON TIME because these victims would feel so much better if this Canadian where to meet up with Bubba and his big - BL*CK thick-fat batton shoved right up his creamy-wh*te virgin Bvng-hole as he screams, "I won't scam anymore!!!!"
I dont know if any other credit card companies have this, but citicard has virtual credit card nbrs. You create a separate one for each transaction with a specific [presumably exact] amt and expiration date. Once the merchant settles to it, its also tied to that merchant so even if the nbr is stolen, nobody else can use it and/or its overdrawn and/or expired. Citibank otherwise sucks but I keep the card just for this feature and pay it off every month. Just another layer of protection.
Except people like this get sent to White-collar resorts, not (love this quote, "Office Space") Federal pound-me-in-the-ass prison.
Perhaps at one point but, lately, Citibank has taken giant strides to become more consumer-friendly and I like doing business with them.
@peanutGalleryTheater
I did not know this...I am a former Citibank customer whom they did wrong so I canned them for greener pastuers. I still get non-stop offers from them and this feature plus Auzziegirl's note may just win me back. Anyone know any other companies that do this? I'd prefer not to go crawling back to Citibank lol.
Actually @Ken that's a myth. Look up the actual research on size. Yes, they've done studies on this. LOL Even better look up who has the biggest in the world. A white dude. Just saying...
Andrew, Bank of America also offers virtual card numbers. You can set the amount you put on them. They are great to make purchases from merchants you do not know well.
I got burned by these bastards as well. Eventually I got my money back but it was a royal pain in the azz... these folks should be hanged by their balls from a tall oak...
So his 11 companies are prohibited from doing this again.
Simple solution - Open up another 11 companies.
This guy belongs in jail.
@Auzziegirl: Yes, Citibank still sucks IMHO. I wish you the best of luck in your employment with Citibank ;)
@Aannddrreeww: I was a customer for 25 years, so I have some background and experience with them. They did me wrong also, don't trust them.
He belongs on the end of a rope ....... Hanging
This guy and his companies need to be busted - literally!
Nothing is free----all these free offers on the internet making fantastic statements like lose 50 pounds in 50 minutes. In this day and age if you created a wonder weight loss product, a guaranteed investment plan, the miracle wrinkle reducing Spackle...........if any of these products were real and true to their word they would never have to spend a dime on advertising because everyone would be talking about them.
Go on thinking that Google and Facebook are free. You pay them all the time with every bit of info you give up about your life that is being stored in a giant database. Nothing is free.
The world is full of so many desperate and naive people that these con artists will never run out of ways to make money. We can make you feel 25 years old no matter what your age. This add on will increase your gas mileage by 3000%. Take this pill and live on fast food without gaining a single pound. Yes, there are people stupid enough to buy into the most outrageous claims.
The sad thing is, the internet can be used to educate yourself about all this. You can learn how to make your web surfing experiences safer--go to sites like Scambusters or Snopes to find out if it is real. Instead of reading stories about who Rhianna is playing trampoline with this week, read something that might educate instead.
If you need help learning how to work the web safely just ask. For every 100 or so ignorant web surfers there is one that knows what they are doing.
I know this is contrary to every single post here.
But, why should it be illegal to convince stupid people to give you money???
I agree that outright fraud is fraud and negative option marketing is wrong.
But if someone is stupid enough to buy the Acai-berry (lose 5 pounds in one day) weight loss program, maybe they deserve to loose their money.
How is it different from astrologers, carnival games, or reality shows???
Its all stupid BS, but stupid people are still willing to pay for it.
Ever since the dawn of the "contract" people have been making money on the "fine print" and the people too lazy to read it.
Citi, BankAmerica and Discover all have VANs (Virtual Account Numbers) which work for only one vendor, for a limited time and amount. They may use a different trade name for the product (Discover calls them Secure Online Account Number, listed in More from Discover Card section of homepg.) Chase does not have VANs, as far as I know.
I use virtual numbers, with limit, for anything I pay for online. I pay my Netflix, land line, cell phone, newspaper subscription, and any online purchases this way. It is much better than using your actual credit card number and muchmuchmuchmuch better than using a debit card (which has access to anything in your checking account and perhaps linked accounts like savings, home equity line, etc.) Even reputable companies can have crooks working for them, or can get the customer list hacked. The virtual number will not work at another vendor after first use, and won't work anywhere when the balance is depleted. If they were used for all online transactions, a lot of scam artists would be SOL.
He sounds pretty stupid to ME! After all, he got caught, AND has to pay it all back, plus some! Though, it doesn't say anything about legal action aside from the possible $359,000,000 judgment against him. I'm having a hard time understanding why he's not being thrown in jail for this! But, maybe it would be better to see him homeless, begging for pennies so he can experience what others may have been through after he swindled them! I'd rather see that than to have to use taxpayer dollars to pay for his cell, food, and everything else while he's incarcerated. Either way, I hope he gets his due comeuppance!
I agree with Chitown Matt. I've never been scammed by these things because I READ THE FINE PRINT!! This happens all over the place...did you all read every page of your mortgage? Lots didn't and find themselves in a mess. It's certainly not limited to the internet. Remember the Columbia Club records? If you didn't cancel with them, you got more records that you had to pay for. Same with magazines and books...get some free and you find yourself with a subscription unless you READ THE FINE PRINT! Unless there are laws in Canada saying this type of business model can't be used, as long as it has full disclosure, which is IN THE FINE PRINT, I'm not getting the problem. We shouldn't have to have the government make laws for us so we'll read and take responsibility for our own purchases. That seems the height of laziness to me, that we can't be responsible enough to read everything to make a personal choice. It's just not that hard to READ THE FINE PRINT!
ChitownMatt...I agree, however some of these companies use the credit card # you give them for additional charges for things you never agreed to or even heard of. Once they get your number they just charge something to it every few months and figure if the charge is small enough they will get away with it , and they often do. The "virtual credit card number" some other poster mentioned, works great to prevent this type of thing, I have used it for years. It is great for those items that offer something free but if you don't cancel in a certain time period, it becomes a subscription. Just give them a "virtual credit card #" with an expiration date the next day, and you don't have to worry about remembering to cancel things.
I'll bet this ruling chaffed the ass of most of the cable television people. This will put a damper in their revenues.
He should have just charged smaller amounts. Even a couple bucks charged from 4 million people is 8 million dollars...
it always amazes me how quick people are to resort or wish for someone to be raped and violated under supposed 24/7 protection.
he stole $359 million. I think he should be charged the same as if he robbed a bank.
I'm glad to see penny auction sites are finally being lumped in with "illegal practices".
Scammer stole 3.5+ billion in shareholder equity and interest by running a large auto company into the ground and then using taxpayer money to bail them out and pay the pensions. All this under government watch.
Scammer stole 35+ billion by repackaging junk loans and selling them as A grade, causing a financial collapse and using taxpayer money to bail them out. All this under government watch.
Oh wait, my mistake!!! These were different articles and in both cases no one was prosecuted or to blame, unlike this one in which they can point a finger at an individual for the blame and call him an evil criminal.
My boo.
If only he had an ounce of weed on him, then he would be in jail for a decade. You can intentionally misled and deceive people for hundreds of millions of dollars, but you cannot smoke a drug that has no documented cases of overdosing. And the catch 22 is that you have to smoke mary jane to deal with this insanity.
Glen, that's the value of a higher education, you can literally steal America ... LOL
There are a few penny auction sites that are reasonable. If you bid, and don't win, the bid amount is returned to your account. Fair. The scam sites do not return you bid amounts. However, anyone who thinks they will get a 50 inch tv for $200.00 is dreaming.
The ones I love are the "health/diet" scams. You get a free 30 days supply. Then, read the fine print - takes 90 days for most results to show. if you don't cancel, you get billed for the first 30 day supply, plus the next 30 days. usually at $39.99, plus $7.00 s&h. Of course, the pills and bottles, made in China, cost $ 3.00 to make. That's what? 1,000% mark up. Even GE doesn't do that well.
BTW: fact; Exxon makes about $.09 profit on the dollar in sales. WalMart makes $.17 on the dollar in sales. GE makes $.22 cents on the dollar in sales. And paid 0% income taxes. GE is also the largest US Govt. contractor. GE Ceo is Obama's chief labor adviser. Hmmmm.
There is no such thing as a free lunch...There is always a catch!
Yeah, about the only thing you get for free is other peoples advice and opinions!
Scammer stole 3.5+ billion in shareholder equity and interest by running a large auto company into the ground and then using taxpayer money to bail them out and pay the pensions. All this under government watch.
Scammer stole 35+ billion by repackaging junk loans and selling them as A grade, causing a financial collapse and using taxpayer money to bail them out. All this under government watch.
Oh wait, my mistake!!! These were different articles and in both cases no one was prosecuted or to blame, unlike this one in which they can point a finger at an individual for the blame and call him an evil criminal.
My boo.
He is just doin' business The American Way......
He should run for office, don't you all think?? The fleecing of AMERICA!!!
Well following the (il)logic of "they should have know better so they got what they deserved" it should then also follow that anyone that knows it is a crime to misrepresent themselves and knowingly defraud people and people become irrate and often quite violent as a result of being victimized by that fraud then whatever misfortune befalls the con artist is what HE deserves.
The amazing thing is these illicit companies didn't create this process. They stole it from legitimate companies and milked it for everything it's worth.
It is amazing he has not had his legs broken.
I haven't gotten his address yet.
Check out his personal site: http://www.jessewillms.ca/
And scroll through the pictures at the top. I think it is the 4th or 5th one in. You will understand much more when you do.
Skull and Bones? That certainly does speak more than any other article!!
Perhaps I overlooked it, but.... where in this story is the part about how many months or years of prison this guy will have to serve?!?!?
He made such a tall pile of money he is in the stratosphere like a banker. That is why he won't go to jail.
How does that saying go? 'A fool and his money......'
People just can't resist being suckered, free gets them every time.
Post a sign pointing to an alley "free mug this way!" and people will think "cool free coffee cup" right before they get hit in the back of the head.
"There's a sucker born every minute" - P.T Barnum, (attrib) -c.1860
True then, still true today.
Why aren't Mr. Willms and partners headed to prison?
Because they are now the top 1% and are able to buy their way out.
Why didn't I see this guy was sentenced to ? of years in prison for his crimes? Are the Canadians that good at protecting their citizens from real prosecution? Or is our government that lax in protecting the interests of the American people? When the dust settles he'll probably still be a millionaire many times over!
"Or is our government that lax in protecting the interests of the American people?"
According to 2008, im going with yes
Notice how these businesses were operated since 2007? Five years later, the FTC got a cease and desist and some of the money back. How much would have been saved if our "watch dog" hadn't been sleeping for five years? And how much of that judgment will be retained by the FTC? Returned to consumers? Notice there is nothing about the FTC making refunds either.
Ladies & Gentlemen & Children Of All Ages ....
As the venerable and consummate showman and impresario Phineas T Barnum said more than a century ago; " There's a sucker born every minute."
Peace to all
I will never cease to be amazed at the sheer numbers of people that continue to fall for these tried and true scams.
The way to approach any offer involving FREE anywhere in the ad is to stop and think. Ask yourself this question; why would a company spend the money to develope a product (R&D), then manufacture it in a costly building and machines with labor costs, spend advertising dollars to make you aware of it, then spend money to package and ship it to you, ALL FOR FREE!
Can you see a possibility that it is not going to be FREE to you in the end?
If you answer no, then just keep getting out your credit card. The world is waiting to separate you from your money at a high rate of speed!
They market it as a free TRIAL OFFER, meaning if you like it (or don't send it back) they will charge your card, and then continue to charge your card every month you dont cancel your order. It happened to me, only everytime I called to cancel, I was told their computers were "down" and they were not able to access my information. Their computers were "down" for over a month before I got fed up and had to change my credit card numbers.
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Maybe he should be forced to use his "colon cleanser" every day for a year.
The customer list would be a goldmine in itself. When you have a list of people willing to try a colon cleanser from a website (regardless of the price) you know it is grade A sucker material. These folks would gladly write a blank check for the Bay Bridge, elixir from the Fountain of Youth, and advice on finding True Love.
There is no amount of consumer protection or education that will help them.
he robs people of millions and is not going to jail? If a person shoplifts a few dollars worth of stuff they go to jail. Where is the justice system?
David, don't be silly. The justice system is just for the little people.
This is not the first time this has happened, and people are still falling for that s--t? Why? When will people learn, there is no such thing as free? You always end up paying for something. There are always going to be sharks in the water, if you cant surf with them, stay out! The internet is a magnet for crooks and scammers. Sad but true! If they ask for a credit card or debit card number,--run, run fast and far!
My only question is why the “Con Man” is NOT going to jail. Theft is theft plain and simple; that is what’s wrong with our whole justice system. It is easier to make plea deal than put them in jail, same way with the Banks & Wall Street got off. If I was to rob a person on the street I would definitely end up in jail.
American justice; you can get away with almost anything for a price…
Did I miss something.. $359mm dollars from only 4mm people how is that? Is the math or figures wrong here or were these really weathly people to begin with?
That's less than $100 per sucker by my reckoning
Thats less than $100 per person. That is the whole point to these types of scams. You scam 359 people out of a million each and law enforcement is at your door in 15 minutes. Steal less than $100 from 4 million and you get away with it for 5 years.
Did you know that this person, worked in Gov't?? It's called screwing all people, regardless of income....Give to prez re-election, no penalty..Get it??
Remember the words from the Forest Gump movie, "Stupid is as stupid does ?" That's not saying the victims were stupid, but the dummy that finally got caught was stupid-Did he really think he could go on forever without being caught ?
Yeah, but he got to live the good life off someone else's money and won't have to spend jail time apparently.
And yet MSNBC.com continues to accept advertising from similar scam companies...
Companies like this don't do it without support from banks and credit card companies. And you don't need to click something to get billed.
Recently my own bank signed my up for something I didn't ask for and billed me. When I tracked down how it happened it was thru a 3rd party working for the bank. Everyone needs to CAREFULLY go thru their credit card statments each month to catch these scams.
Cell phone companies have the same scam going with their "3rd party billing feature."
The penalty for this white collar crime should life in prison...
Anything "free" that needs a credit card number is going to find a way to bill you for something.
well said!
shouldn' negative-opition marketing be illegal for all companies.... doesnt that allow these things to happen....
Usually - Only illegal aliens and generational Welfare people get something for nothing.
Your parents paid for your education, and it happened to them as well.
And 7 dumbasses agreed with your post?
You must have a large family who overstayed their tourist visas.
Spoken like a redneck.