Defunct Goleta-based company Commerce Planet has agreed to return thousands to customers who signed up for a free online auction kit that turned out to have hidden fees.
According to a Wednesday news release from the Federal Trade Commission, Commerce Planet is mailing out 53,595 refund checks totaling $748,070.
The settlement is the result of FTC actions against the company and its principals Michael Hill, Aaron Gravitz, and Charles Gugliuzza.
According to the FTC’s amended complaint, “Commerce Planet operated a website that deceptively pitched consumers a ‘free’ kit with information about how to start a business selling products using online auction sites. Many consumers who ordered the kit were unwittingly enrolled in the Online Supplier program and charged monthly fees without their consent,” read the news release.
The FTC claimed an 18-month period Commerce Planet did not clearly and conspicuously disclose that, by registering for the “free offer,” consumers also agreed to be enrolled in the program. They were charged a membership fee of up to $59.95 per month unless they cancelled within a few days of ordering the kit.
Mr. Hill and Mr. Gravitz agreed to settle with the FTC. They will pay compensation and are prohibited from engaging in deceptive and unauthorized billing practices under the agreement.
The settlements were reached in 2009 according to an FTC news release at the time.
A court found Mr. Gugliuzza liable for consumer injury ordered him to pay consumer redress.
The Ninth Circuit Court of Appeals upheld the findings against Mr. Gugliuzza but remanded the case so the court could amend its order.
Money from the judgments in each order is being used to send the customer refunds.
“We began receiving a series of complaints about Commerce Planet as far back as October 2005, said Richard Copelan CEO and President of the Better Business Bureau Serving the Tri-Counties in a statement on the case.
“We were then contacted by the FTC and we assisted them in building their case,” he said.
Victims who have questions about obtaining a refund should contact the FTC’s refund administrator, Analytics Consulting, LLC, at 1-844-817-0897. Those who receive a payout should deposit or cash checks within 60 days, as indicated on the check.