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Publishers Clearing House, a direct marketing company that uses sweepstakes to sell magazine subscriptions, was sued Monday by the Federal Trade Commission, which accused the company of using so-called dark patterns to trick customers into paying. agreed to pay $18.5 million to settle the litigation. Transfer the product or give up the data.
The lawsuit alleges that the company misled customers by making false suggestions, such as that purchasing the product was the only way to enter the popular sweepstakes, or that purchasing the product would increase the chances of winning. It is said that he was forced to do so. The company is also accused of charging customers hidden fees at the time of purchase, sending deceptive marketing emails and misleading customers about how their data is used.
A lawsuit filed in the United States District Court for the Eastern District of New York says many of the customers who fall victim to these schemes are older and have lower incomes. In addition to paying $18.5 million, which the FTC said it would use to refund customers, the company agreed to tweak its interface to prevent further confusion.
The Publishers Clearing House did not respond to a request for comment.
Why it matters: “Dark patterns” are now being used more frequently.
As more commerce moves online, dark patterns using deceptive designs to trick consumers are becoming more common, the FTC said. Report published in September.
A common dark pattern is when companies make it difficult to cancel subscriptions or purchases by pushing customers away from the option. For example, a company offers a free trial, but the cancel button is hidden deep in the account settings.
In other cases, companies may present privacy settings in ways that persuade customers to reveal most personal information without informed consent. The FTC accused the Publishers Clearing House of doing this, saying it did not share customer data with third parties before January 2019.
The Publishers’ Clearing House also stated that the “High Priority Document. W-34 Issued” email contained irrelevant marketing content, yet the client was unable to process the pending tax forms. It made me believe I needed to deal with it.
Background: Amazon has also been accused of similar conduct.
The FTC on Wednesday sued Amazon for a similarly bleak pattern of regulators illegally forcing consumers to sign up for the tech giant’s Prime service and preventing them from easily canceling subscriptions. Amazon denied that its website interface violated the law.
The lawsuit is the first lawsuit filed against Amazon by the FTC under the leadership of long-time critic of Amazon’s market power, Rina Khan.
“We are vigilant against companies that continue to implement deceptive design techniques,” said Samuel Levin, head of the FTC’s consumer protection division, in a statement.
