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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:
Out and out thievery.
PT Barnum is alive and well...and living in Canada! Barnum's Law proved again: Nobody ever goes broke underestimating the stupidity of the American consumer.
Here's the so-called "Free Market" at work, folks. Remember this the next time some right-wing wacko claims that an unregulated free market is the solution to every problem in this world. Human beings are not angels, and only regulation and the rule-of-law prevents predatory capitalism like these scams.
Sorry thought you had something to say there........reread it and........no you didn't. No one has ever said "unregulated" just not over regulated. Guess you missed it where Obama has sent his people to look at regulations that they can get rid of.........funny never thought of Obama as a "right-wing wacko" but you could be right.
Just in case you wanted to see just a couple of quotes.
In an appearance with Canadian Prime Minister Stephen Harper last week, President Obama declared:
And in September, President Obama explained his decision to reject EPA’s update to smog standards by saying:
I'd think negative option should be illegal for all companies. Farmers Insurance did that to me, trying to sell me more insurance. I called them up told them I didn't want it - and also read them the riot act for their marketing scam of telling me I bought it unless I tell them no. He didn't get it - I told him how would you like it if I signed you up for a lawn service unless you say no - you're already signed up and you owe me money? A few weeks later - they charged me for the extra insurance anyway!
I took all my insurance away from them, home, car and boat. Never again Farmers! BTW: that wasn't the only thing this same agent did, just one of many.
LEECHES. parasites it will never change.
395 millon dollers; That should just about cover his court costs,taxs and paying people..Oh wait I forgot the goverment doesn't make guys like this pay back the ones they take the money from. Do that and guys like this will stop conning people over night!
I NEVER give out that info over the phone, I was victimized too, where it came from I don't know. They copied my debit, and hey I was buying skiing equip in Sweden while living here. Luckily, the bank caught it. Nice scam, he got greedy. He deserves more than a knee capping.
Free Isn't.
If any companies product were believed to be so great by the company itself they would ship it to you free also, as they know you would return to purchase more as well as advertise for them by word of mouth.
So smarten up folks...If they ask for a Credit Card Number they are out to screw you guaranteed!!!
I would try something like this if i believed people were really just that stupid???
Well go for it, apparently they are!
nvrmnd
Justice would be to place each of these guys in his own life-raft in the center of the pacific ocean with no paddles. Only the encouragement of his NEW FRIENDS to assist him. If they get out alive, they walk free. Otherwise they become shark bait.
Un Oh, there goes most of MSNBC's advertisers....
total 'tards fell for this
addition to the relinquishing the assets and returning the monies they sold for the stupid people, they need to GO TO JAIL and be BARRED FROM THE INTERNET!!!!!
because they are only going to do their evil deeds again and improve upon their technique.
If somethings free there should be no reason to put a credit card number in. Even if they arent just straight up stealing info then they rely on you to forget about your "free-trial" that AUTOMATICALLY starts charging you card as soon as the trial ends. The longer it gets to charge you before YOU notice, and NO ONE else, the more money they make... and theres no way to get it back. Free-trials should NEVER require a credit card. Its a dirty business trick even if they do it legally.
Another capitalist taking advantage of free enterprise, but then the Government doesn’t like competition!
$359 million? there is a sucker born every minute. I would sure have thought evry EVERYBODY would know better than that by now. And in the end he will lose his cars and stuff plus they will probably fine him $5 or $10 million and he will be sitting fat and happy in pango pango with the remaining $200 million, but crime dosn't pay, right?
http://www.jessewillms.ca/
Check out who is buddy is on the 4th/5th picture... poor W can't catch a break.
It's hard to believe "Come and Get It" was written in the '70s and people *STILL* fall for this cr@p... "...fool and his money..."? Indeed!
Hm... Wait, don't I see a lot of these scammy ads ON MSNBC.com? Yes, yes I do.
So the site's perfectly willing to warn you about this crap, but still has their hands extended to the douches who run them for the cash.
Kind of dispicable, no?
Yet these ads proliferate on MSNBC. Hmmmm..
This guy should have to pay the whole amount, taken from his paycheck for the rest of his life. Give him $20,000 and a trailer.
Scumbags like this are why MSNBC readers all this hard working small business people who put in 70+ hour weeks for a lower middle class income are evil.
I agree, but instead of 20 K and a trailer, give him a prision sentance, then after he has served his sentance, a tent and a pack of cigarettes.
Thought the story was a "trailer" for Obama-Care.
My bad, that scam is waaaaaaay bigger.
Disgusted: And yet, on Willm's website he is pictured with his happy, grinning buddy - none other than George W. Bush!
-"none other than GWB", who gave us the scam of Medicare part D, Jan. No fan of that "spend like a drunken sailor" either.
Don't avoid the point by alluding to a different mistake ( Bush). Take care.
If something sounds or looks too good to be true, it usually is!
POS
About 90 percent of what is online is a complete scam. As a seller of used automotive parts, every day I get people "fishing" for any kind of info they can get from me. I will only deal with people that call me on the phone, NO EMAILS. I do get calls from toll free numbers, con men and/or women that got my phone number online, but I refuse to give any info to these clowns.
I miss the old day's.... swap meets and newspaper ads, it was a lot more honest and I made a lot more money.