On August 7, 2017, the FTC announced that it obtained a court order temporarily halting an online marketing scheme that deceptively lured shoppers into expensive negative option plans. The FTC alleged that defendants used initial low-cost trial offers to hook consumers into expensive monthly shipments without properly disclosing the terms and conditions of the deal or properly obtaining their consent.
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Over the past few months, a new trend has emerged that has ramifications for virtually every participant in the online retail space: a rise in the number of class action claims challenging allegedly excessive shipping and handling fees. Regardless whether an online retailer offers flat or incremental fees, standard and expedited options, or free shipping with returns-only fees, few are immune from claims that the fees charged do not align perfectly with retailers’ underlying shipping costs.
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The first blow to the recent expansive application of the New Jersey TCCWNA was struck by a federal court in California last month. In Candelario v. Rip Curl, Inc., the Central District of California granted a motion to dismiss a complaint alleging a TCCWNA violation of website terms and conditions because the plaintiff lacked Article III standing.
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TCCWNA. The very acronym evokes head scratches and sighs of angst and frustration among many in the retail industry. The New Jersey Truth-in-Consumer Contract Warranty and Notice Act was passed in 1981 to protect consumers from allegedly deceptive practices in consumer contracts, warranties, notices and signs. Continue reading for an in-depth view of the TCCWNA and what retailers can do to minimize risk.
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