Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Monday, June 17, 2024 | Back issues
Courthouse News Service Courthouse News Service

Class Alleges Online Billing Scam

SAN FRANCISCO (CN) - A federal class action accuses Clarus Marketing Group and Provide-Commerce of defrauding online shoppers by enrolling them in a "membership program" that costs $9 to $15 a month if they click on ads offering free shipping with a purchase.

The class claims that website provider Provide-Commerce conspired with Clarus to "split the spoils" of the scam.

They claim that during checkout on Provide-Commerce websites such as ProFlowers.com and RedEnvelope.com, they were directed to enter "innocuous information such as an email address and ZIP code to create a pretext to charge the debt and credit cards based on the silly claim that plaintiffs and the class could lawfully 'authorize' Provide-Commerce to pass their billing information to CMG and 'authorize' CMG to begin billing their cards based solely on the provision of an email address or ZIP code."

The class adds: "Defendants' scam is akin to a person walking into a retail store and being offered a coupon to use in exchange for providing his or her email address on a form. And then having his or her credit or debit card information subsequently forwarded by the store to the person standing outside with the form, who incidentally was wearing the store uniform, and charged repeatedly by that person, based on the fact that somewhere on the form (and perhaps even on the back or the second page) there was a disclosure that the customer was 'authorizing' this to happen. Nobody would contend that this is an acceptable business practice. Rather, the person making the unauthorized charges and the store employee sharing the billing information would be in jail!" (Parentheses in complaint.)

Lead plaintiff Daniel Cox claims that when he bought flowers from ProFlowers.com, he clicked on an ad that offered free shipping for up to 12 future transactions, but "never believed he had joined any type of membership program ... and never intended to do so."

Cox says he recently discovered unauthorized monthly charges of $8.67 to his credit card, made by Clarus.

Plaintiff Bradley Berentson says the same thing happened to him when he clicked for free shipping on RedEnvelope.com, but the monthly charges were as much as $14.95.

"Plaintiffs were never told that they were no longer on the ProFlowers.com and RedEnvelope.com website anymore - or had unknowingly been directed to a CMG interface!" the complaint states.

"They were also never directed to the truth about what was going to happen to their debit and credit card information - and that by accepting the free shipping offer, they were unknowingly 'authorizing' CMG to begin billing a monthly fee to the debit and credit cards they had provided to Provide-Commerce."

The class claims that Provide-Commerce and Clarus blame that shoppers for not reading all the disclosures before providing their email addresses.

"But just as the shopper walking into the store has no reason (and likely no time) to read a solicitor's forms before providing his or her email address, plaintiffs and thousands of putative class members had no reason, and most importantly, no obligation to read defendants' form 'enrollment' page before providing their email addresses," the complaint states. (Parentheses in complaint.)

It adds: "But perhaps most importantly, the disclosure assumes that plaintiffs could lawfully authorize CMG to begin billing their debit or credit cards merely by entering their email and zip code somewhere else, and without ever even providing their debit or credit card number, or billing information to CMG. This is preposterous."

Provide-Commerce, based in San Diego, operates "at least five online stores: RedEnvelope, ProFlowers, Cherry Moon Farms, Secret Spoon, and Shari's Berries," according to the complaint.

The class demands punitive, treble, special and statutory damages for civil theft, unjust enrichment, fraud and invasion of privacy. They are represented by James Patterson with Harrison Patterson & O'Connor of San Diego.

Follow @MariaDinzeo
Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.