eCommerce
On January 13, 2026, the Federal Trade Commission announced that it sued a specialized advice website operator and its CEO, alleging the online service deceives people seeking expert advice into enrolling in a monthly recurring subscription without obtaining consumers’ affirmative consent.
The FTC alleges that the company and its founder and CEO falsely claim that consumers can “join” the service and get access to expert advice for as little as $1 or $5. But when consumers sign up to use the service, the company actually enrolls them in a recurring monthly subscription costing anywhere from $28 to $125 and immediately charges them this fee, as well as the $1 or $5 join fee, according to the FTC. The complaint alleges that the company continues to charge the subscription fee every month until the consumer cancels their subscription.
“[The company’s] misleading pricing tactics obscured the true price of its services, preventing consumers from making an informed choice on whether [the company’s] services were worth it to them,” said FTC lawyer Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “The FTC is focused on ensuring that online sellers transparently price their services.”
While the company provides limited information about the required monthly subscription on its website, it does not disclose the terms clearly and conspicuously as required by the Restore Online Shoppers’ Confidence Act (ROSCA), according to the complaint. As a result, consumers have provided their credit card information to the company without affirmatively consenting to enroll in an ongoing monthly subscription and pay the monthly fee,
On January 6, 2026, the Federal Trade Commission announced that it has launched a refund claims process for some consumers who were charged for a subscription to the anonymous messaging app NGL without their authorization.
In July 2024, the Federal Trade Commission and Los Angeles District Attorney’s Office alleged that NGL and two of its co-founders engaged in a host of law violations related to their anonymous messaging app, including unfairly marketing the service to children and teens. The agencies charged NGL and its co-founders with sending bogus messages that appeared to come from real people and tricked users into signing up for paid subscriptions to NGL Pro by falsely claiming that doing so would reveal the identity of the senders of messages.
The complaint also alleged that the company encouraged users to purchase a paid version of the app to learn the identity of the people who sent them anonymous messages, however after consumers upgraded they did not actually learn the senders’ identities.
NGL and its co-founders also allegedly failed to obtain consent for recurring charges. The order settling the agencies’ complaint banned the defendants from marketing anonymous messaging apps to kids and teens under 18 and required them to pay $4.5 million to provide refunds to impacted users.
According to an FTC compliance attorney, the FTC is using that money to provide payments to customers who meet the following requirements:
- paid for NGL Pro between January 2022 and July 2024;
On January 5, 2025, NYC Mayor Zohran Mamdani, joined by Attorney General Letitia James, City Council Member Julie Menin, and DCWP Commissioner Sam Levine, announced that it has signed two executive orders: to combat businesses’ deceptive use of junk fees and crackdown on subscription tricks and traps that that drain money from New Yorkers and make essential goods and services less affordable.
Following the signing, DCWP will begin outreach to businesses to ensure compliance with city law and signal immediate consequences. Contact an experienced New York DCWP (DCA) defense lawyer if you have been contacted by the NY DCWP or the NY Office of the Attorney General relating your billing practices.
“New Yorkers deserve to know exactly what they are paying, how much it will cost, and whether they are signing up for an ongoing charge — before a single dollar leaves their account. Instead, too many people are hit with hidden fees and blindsided by subscription traps they never knowingly agreed to and cannot easily escape,” said Mayor Mamdani. “In the midst of an affordability crisis that is already pushing working New Yorkers out of their city, these deceptive practices put even more strain on household budgets. This executive order restores what should have always been the case: transparency in pricing, accountability for companies, and full compliance with the law.”
“New Yorkers are paying too much for everyday services because of hidden, unexpected junk fees and illegal subscriptions traps.
As previously covered here and here, the Federal Trade Commission has recently warned businesses to comply with the FTC Consumer Review Rule.
On December 22, 2025, the FTC announced that it sent warning letters to alert a number of companies of potential violations of the Rule on the Use of Consumer Reviews and Testimonials (the “Consumer Review Rule”). The letters warn of potential violations of the agency’s Rule, which prohibits certain deceptive or unfair conduct related to the use of product reviews in advertising and marketing.
These letters confirm, for example, that companies violating the Consumer Reviews Rule may be subject to FTC enforcement actions, civil penalties of up to $53,088 per violation, consumer redress and other remedial measures. Consult with a FTC CID lawyer for how the FTC Consumer Review Rule may impact you or your business.
The Consumer Reviews Rule prohibits reviews and testimonials that misrepresent whether a reviewer’s experience was positive or negative, or whether the reviewer used the product or service at all. It also prohibits businesses from conditioning compensation or other incentives on reviewers expressing a particular sentiment, either positive or negative, or from failing to disclose when reviews are written by company insiders or their immediate relatives. The Rule contains additional provisions relating to company-controlled review websites, suppressing certain reviews, and misusing indicators of social media influence like the number of followers or views.
To focus of this article by a leading FTC Consumer Review Rule lawyer is on the FTC Consumer Review Rule prohibition on “insider consumer reviews and consumer testimonials” (16 CFR 465.5).
AI-generated advertisements are a double-edged sword. Digital marketers should be properly advised on risks related to such use in conjunction with advertising campaigns.
For example, the growing use of artificial intelligence in advertising has recently resulted in New York State enacting a new law that carries clear compliance obligations and monetary penalties for advertisers that fail to comply.
On December 11, 2025, New York Governor Kathy Hochul signed S.8420-A/A.8887-B, a first-of-its-kind legislation. The new law requires transparency in digital and social advertising. In short, the new law requires a “conspicuous disclosure” when an advertisement includes a “synthetic performer” in a commercial advertisement.
What is a “Synthetic Performer”?
As set forth by the statute, a “synthetic performer” means a digitally created asset created, reproduced, or modified by computer, using generative artificial intelligence or a software algorithm, that is intended to create the impression that the asset is engaging in an audiovisual and/or visual performance of a human performer who is not recognizable as any identifiable natural performer.
What are the Disclosure Requirements Under the New Law?
Any person, firm, corporation, or association (or their agents or employees) engaged in the business of dealing in any property or service who for any commercial purpose produces or creates an advertisement before the public in New York respecting any such property or service, in any medium or media in which such advertisement appears, shall “conspicuously” disclose in such advertisement that a synthetic performer is in such advertisement,
As previously covered here and here, in March 2025 the Office of the Attorney General for the State of New York introduced the Fostering Affordability and Integrity Through Reasonable (“FAIR”) Business Practices Act in the State Senate and State Assembly. The proposed legislation is intended to revise Article 22-A of New York’s General Business Law.
The FAIR Business Practices Act passed the State Legislature in June 2025.
On December 20, 2025, New York Governor Kathy Hochul officially announced the signing of the historic consumer protection law. The legislation expands and strengthens New York’s primary consumer protection law, GBL §349, for the first time in 45 years. The new law now protects New Yorkers from unfair, abusive, and deceptive business practices.
“The FAIR Business Practices Act will help us tackle rising costs and protect working families and small businesses,” said Attorney General James. “I am proud to have worked alongside Senator Comrie and Assemblymember Lasher to update our most important consumer protection law for the first time in 45 years to stop predatory lenders, abusive debt collectors, dishonest mortgage servicers, and so much more. At a time when the federal government is abandoning working people and raising the cost of living, this law will help us stop companies from taking advantage of New Yorkers. I thank Governor Hochul, Senate Majority Leader Stewart-Cousins, and Assembly Speaker Heastie for their leadership and look forward to working together to make our state more affordable.”
“I commend the Governor and Attorney General James for advancing the FAIR Business Practices Act,
The use of subscriptions models in the digital advertising marketplace has become ubiquitous. So have legal regulatory investigation and enforcement of such ecommerce practices.
It is paramount for those that utilize such models consult with an eCommerce attorney to be informed of the legal implications of subscription-based services, including automatic renewals, trial offers and continuity plans.
Federal ARL Legal Regulations
At the federal level, the Federal Trade Commission enforces, without limitation, the Restore Online Shoppers’ Confidence Act (“ROSCA”). ROSCA compliance is an FTC investigation and enforcement priority. To date, the FTC has initiated approximately 50 ROSCA actions. The largest ROSCA settlement to date is $2.5 billion.
ROSCA prohibits any post-transaction third party seller (a seller who markets goods or services online through an initial merchant after a consumer has initiated a transaction with that merchant) from charging any financial account in an Internet transaction unless it has disclosed clearly all material terms of the transaction and obtained the consumer’s express informed consent to the charge.
“Clear and conspicuous” disclosures are the centerpiece of ROSCA. “All material terms” must be adequately disclosed prior to obtaining the consumer’s billing information. Additionally, a consumer’s expressed informed consent my be obtained prior to charging the consumer’s credit card, debit card, bank account or other financial account for products or services through such transaction. And, a “simple mechanism” for a consumer to stop recurring charges must be provided.
ROSCA violations are aggressively enforced by the FTC or state attorneys general as unfair and deceptive acts and practices.
On December 3, 2025, the Federal Trade Commission announced that it has given final approval to an order against a telemedicine company and its principals, requiring them to stop the alleged deceptive advertising of weight-loss programs and to stop the alleged use of deceptive and unfair billing and cancellation practices.
In its July 2025 complaint, the FTC alleged that the company and certain individuals associated therewith “exploited skyrocketing interest in prescription glucagon-like peptide 1 agonist (GLP-1) weight-loss drugs like and Ozempic.” FTC lawyers also alleged they sold weight-loss programs with undisclosed costs and membership commitments, made unsubstantiated claims about the weight loss achieved by their clients, used fake testimonials, and unfairly distorted consumer reviews.
According to the FTC, the firm and its principals also allegedly failed to process cancellation and refund requests in a timely manner and failed to obtain express informed consent before charging consumers or making recurring debits, according to the complaint.
The final order requires the foregoing parties to pay $150,000, which is expected to be used to provide refunds to consumers.
The final order also:
- prohibits them from misrepresenting the cost of telehealth services;
- requires competent and reliable evidence to support claims about the average or typical results users will achieve;
- prohibits misrepresentations that reviews are truthful or from real consumers, and requires disclosure of any unexpected material connection with endorsers or reviewers;
- prohibits manipulation of reviews;
The Federal Trade Commission and National Advertising Division of BBB National Programs set forth their enforcement priorities during the 2025 ANA Masters of Advertising Law Conference,
Not surprisingly, the FTC set forth a bread-and-butter enforcement agency. It includes, without limitation, protecting children (Children’s Online Protection Act (16 C.F.R. § 312); enforcing Made in USA (U.S. Origin Claims) (Made in USA Labeling Rule – 16 C.F.R. § 323); enforcing subscriptions, negative options and automatic trial programs (Restore Online Shoppers’ Confidence Act), Dark Patterns and Click-to-Cancel); Enforcing the FTC Rule on Unfair or Deceptive Fees”); enforcing target advertising and surveillance marketing techniques; enforcing influencers, consumer reviews and endorsements (The Consumer Reviews and Testimonials Rule: Questions and Answers – 16 CFR Part 465); and enforcing the use of AI (for example and without limitation, exaggerating the capabilities of AI features).
Consult with an experienced ecommerce attorney to discuss the implementation of preventative compliance measures or if you are the subject of a regulatory investigation of enforcement action.
Other areas which are reasonably certain to receive increase regulatory investigation and enforcement attention include but are not limited to, data privacy, Telephone Sale Rule, Telephone Consumer Protection Act, state unfair and deceptive business practices,
Additional key highlights and takeaways for discussion with a qualified ecommerce attorney include the use of health claims, green claims, and social media IP rights and takedown procedures,
Contact the author for more information.
Richard B.
In November 2025, the Office of the Pennsylvania Attorney announced a $750,000 settlement with a collectibles company regarding its “negative option features” and other business practices.
According to an Office of Attorney General investigation that involved more than 200 consumer complaints, it was determined that the company allegedly advertised collectibles and engaged in sales that resulted in consumers not realizing they were enrolled in subscription services — a practice referred to as a negative option feature.
Consumers then had short windows to return goods they were charged for as part of the subscription plan, according to the PA OAG.
Under the settlement terms, the company agreed to pay $750,000 to allegedly harmed consumers, end subscription plans and collections efforts with nearly 200,000 customers, and revise its business and advertising practices.
“Negative option features are a breach of state consumer laws as they are deceptive practices designed to enroll consumers into future purchases,” the Attorney General said. “This settlement will make many consumers whole while requiring the company to change its practices and refrain from negative option features. When buying any products, be sure to read the terms and conditions thoroughly before committing to that purchase.”
According to the OAG, the company advertises and sells collectible merchandise, mostly collectible coins, via direct mail, over the phone, through print advertisements, and through the company website.
Originally, it was alleged that the company was in violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law.
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About This Blog and Hinch Newman’s Advertising + Marketing Practice
Hinch Newman LLP’s advertising and marketing practice includes two decades successfully resolving some of the highest-profile Federal Trade Commission (FTC) and state attorneys general digital advertising and telemarketing investigations and enforcement actions. The firm possesses superior knowledge and deep legal experience in the areas of advertising, marketing, lead generation, promotions, e-commerce, privacy and intellectual property law. Through these advertising and marketing law updates, Hinch Newman LLP provides commentary, news and analysis on issues and trends concerning developments of interest to digital marketers, including FTC and state attorneys general advertising compliance, civil investigative demands (CIDs), and administrative/ judicial process.