Fitness app company settles with FTC for nearly $1 million
“Consumers who used this app expected the defendants to pay them rewards when they achieved their health-related goals, and to charge them only when they did not,” said the Bureau of Consumer Protection’s Tom Pahl in a statement. “Unfortunately, even when consumers held up their end of the deal, Pact failed to make good on its promises.” The FTC also claims that Pact didn’t adequately tell its members how to cancel the service and stop recurring charges.
The FTC claimed that Pact, Inc. engaged in unfair and deceptive practices that violated the FTC Act and the Restore Online Shopper’s Confidence Act, or ROSCA, which prohibits charging consumers without it being clearly disclosed. The settlement makes it so that the defendants cannot continue to charge their customers without a “clearly and conspicuously” disclosure. Pact customers who were wrongfully charged will get more than $940,000 in refunds, as part of a $1.5 million settlement overall (the discrepancy in final amount and the refund amount has been suspended). The company must notify customers and complete payments within 30 days of the settlement order.