April 14, 2008
Kansas City, Mo. - A Utah company that Attorney General Jay Nixon alleged offered "free trials" of a weight loss pill to consumers - but buried a clause about a $99.95 charge in fine print - is permanently barred from doing business with Missouri residents. Steel Bridge Medical LLC of Salt Lake City, which denied any wrongdoing, also will pay $3,799 in restitution and costs under the consent judgment and permanent injunction filed today in Jackson County Circuit Court.
Nixon filed a lawsuit against Steel Bridge Medical on Jan. 10, alleging the company misrepresented to consumers that the "free trial" of the pill Lipoplex would only cost $6.95 in shipping and handling. Nixon said the company failed to adequately notify consumers that signing up for the offer meant automatically signing up for nearly $100 in additional charges.
From at least December 2006 through July 2007, Steel Bridge Medical advertised the "free trials" of Lipoplex, an herbal dietary supplement the company claims will induce weight loss, on the Internet at www.lipoplex.com and www.mylipoplex.com. The sites' order pages referred to a "Free Trial Offer" for an order of the pills, with a line reading "Your credit card will be billed $6.95" for shipping and handling. If they chose to do so, consumers could visit the defendant's "Terms and Conditions" by clicking on a hyperlink.
Nixon says that the only mentions of additional charges were buried within Steel Bridge Medical's three- page "Terms and Conditions" and in fine print on the bottom of the company's two Web sites. A well-hidden clause in the lengthy "Terms and Conditions" also constituted the only warning to consumers of the company's unequivocal no-returns policy.
Consumers who placed "Free Trial" orders were automatically billed for a subsequent shipment of a three-month supply of Lipoplex if they did not cancel their enrollment within 14 days, a cost of $99.95 that Nixon says was charged to their credit or debit accounts without permission. Steel Bridge Medical would then refuse to accept returns of the extra supply of Lipoplex or issue refunds to consumers, the lawsuit alleged.
According to the judgment, Steel Bridge Medical is permanently prohibited from accepting credit or debit card purchases for any product from any consumer whose billing address is in Missouri or fulfilling orders placed by any consumers whose shipping address is in Missouri. In addition, the defendants must pay $1,799 in restitution to consumers and $2,000 to reimburse the Attorney General's Office for the costs of investigating and prosecuting the case.