FTC Acts to Stop Unauthorized Billing Scams That Have Taken in Over $200 Million from Consumers

A U.S. district court in central Florida today unsealed a Federal Trade Commission complaint charging two related groups of defendants with defrauding consumers nationwide by enrolling them, without their knowledge, into continuity plans where they are shipped and charged repeatedly for personal care products that they did not agree to purchase.

The defendants allegedly deceived consumers with ads for “free” CBD and Keto-related personal care products, billing many for products they did not consent to purchase, signing many up for unwanted continuity plans, and debiting money from their bank accounts without prior authorization. In addition, the FTC alleges that some of the defendants laundered credit card payments by setting up bank accounts for shell companies using straw signers.

“These defendants bilked consumers out of millions of dollars by repeatedly charging them for products they never ordered or agreed to purchase,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to aggressively pursuing companies and individuals involved in these unauthorized billing scams.”

The FTC’s complaint names two related groups as defendants: 1) U.K. resident Harshil Topiwala, Florida resident Kirtan Patel, and the three companies they operate, Legion Media, LLC, KP Commerce, LLC, and Pinnacle Payments, LLC; and 2) Florida resident Manindra Garg and a company he operates, Sloan Health Products, LLC.

According to the complaint, the Legion Media defendants have operated two types of unauthorized billing scams. In the first, the defendants market products that supposedly promote weight loss, clear skin, or other health benefits. They then defraud consumers who bought the products by charging them more than the advertised price and enrolling them in continuity plans without their consent in which they are charged for products they never intended or agreed to buy.

The Legion Media defendants also allegedly participated in business impersonation scams where consumers received communications appearing to be from known businesses inviting them to pay a small shipping fee for a supposedly free “gift” online. However, after consumers used their credit and debit cards to pay a fee, they incurred recurring unauthorized charges on their cards. The Legion Media defendants facilitated the scams by securing numerous merchant accounts using shell entities to process the unauthorized online charges.

The FTC alleges Sloan Health worked together with Legion Media by labeling and shipping the deceptively marketed personal care products and handling the large volume of customer returns. The complaint states they shared in the profits of the scheme and distributed the products without providing any information that would reveal their identity to consumers, using only the generic name “Fulfillment Center” and a post office box address in Smyrna, Tennessee.

Based on these allegations, the Commission’s eight-count complaint charges the defendants with violating Section 5 of the FTC Act for misrepresenting that consumers will get free products with their purchases, unfairly charging consumers without their consent, credit card laundering, and business impersonation.

Three counts allege violations of the Restore Online Shoppers’ Confidence Act (ROSCA) for failing to clearly disclose all material terms before obtaining consumers’ billing information, failing to get consumers’ express informed consent before charging them, and failing to provide a simple method for consumers to cancel unwanted recurring charges.

Finally, one count alleges violations of the Electronic Funds Transfer Act for debiting from consumers’ back accounts without their consent. Each count names all defendants, except the unfair credit card laundering and business impersonation counts, which only name the Legion Media defendants. A complete list of defendants can be found in the complaint linked to this press release on the FTC’s website. 

The Commission vote authorizing staff to file the complaint was 5-0. It was filed under seal in the U.S District Court for the Middle District of Florida, Tampa Division, and the seal has now been lifted.

The FTC recognizes the assistance that the following partners provided in this investigation: the United States Postal Inspection Service in Nashville, Tennessee, the Attorney General’s Offices in Florida and Tennessee, the Better Business Bureau in West Florida, the Florida Department of Law Enforcement, and the Tampa Police.

The lead staff attorneys on this matter are Darren H. Lubetzky and Vikram Jagadish of the FTC’s Northeast Region.