A Florida company that sold acai weight loss pills, colon cleanses, teeth whiteners and other supplements has agreed to reimburse millions to consumers nationwide as part of a settlement over allegations of deceptive marketing practices, the Florida Attorney General Pam Bondi said.
XM Brands sold supplements online as XM Labs LLC and used more than two dozen websites to hawk its products. The settlement resolves issues with its trial offers, automatic subscription renewals and automatic shipments. XM Brands have already paid out about $3 million in reimbursements to consumers. Anyone who has a claim and hasn't been refunded has until April 29 to file a claim with the attorney general's office, Bondi said.
Attempts to reach XM Brands for comment were unsuccessful. XM Brands posted that it isn't accepting new orders for any of the products listed on its site.Florida began investigating XM Brands in December 2009 after consumers complained they received products they didn't order. That probe allegedly showed that once a consumer accepted a trial offer, the consumer was signed up for automatic shipments and reoccurring costs tied to getting the trial offer, the state said. XM Brands also agreed to pay about $51,000 to the state for costs and future enforcement. The company also agreed to advertise its terms and conditions clearly and ensure that consuemrs agree to the automatic renewals and shipments before enrolling them.
It was consumer complaints on the enrollments that prompted North Dakota Attorney General Wayne Stenehjem to issue a cease and desist order against the company in August. "Making it worse, because consumers often purchase the products via pop-up websites, it is very difficult for them later to locate the website to cancel," Stenehjem said in a statement at the time.
The Better Business Bureau of Southeast Florida and the Caribbean received 2,821 complaints against XM Brands with a large chunk of those dealing with sales practices and billing issues. More than half of those complaint cases were closed as "unpursuable." The BBB also issued a warning in October to be wary of free trial scams.
Colon cleanses, acai berry weight loss pills, cellulite reduction, anti-aging concoctions and teeth-whitening remedies are the modern-day equivalent of miracle cures and really should be taken with a grain of salt.
What's your investing game plan?View Course »