Online subscription lingerie retailer Adore Me (New York) is being investigated by the Federal Trade Commission for its “deceptive” business model, which entails shoppers opting into a $39.95 monthly VIP membership to make purchases.
According to the FTC, customers have felt misled by the company because they believed they were making a single purchase, and were surprised to see recurring charges on their bank accounts. Other companies employ a similar if not identical business model, and the FTC says it is investigating “a number” of other companies as well. Many of these companies also make unsubscribing or receiving refunds extremely difficult for customers.
Last year the FTC made Adore Me pay back $1.3 million to customers it misled. The commission has settled cases against 12 companies, worth more than $400 million, with two additional cases pending litigation, reports CNBC.