Today, the Federal Trade Commission, joined by the Utah and Nevada Attorneys General, sued to stop a long-running deceptive pricing scheme run by contact lens retailer Lens.com Inc.
In a joint complaint, the FTC, Utah and Nevada allege that Lens.com, along with its owner Cary Samourkachian and an affiliated entity Speed Commerce LLC (together referred to as Lens.com), advertise artificially low prices for contact lenses but then charge consumers much higher prices through substantial, mandatory “Taxes & fees” charges.
Lens.com’s hidden fees routinely double the price it advertises for contact lenses, costing consumers hundreds of millions of dollars, the joint complaint alleges.
“Millions of Americans rely on contact lenses to perform their daily tasks,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “Lens.com advertised one price for contact lenses but charged a substantially higher price at checkout, deceiving consumers about the cost of this healthcare necessity. The FTC’s joint action today with Utah and Nevada underscores the agency’s commitment to lowering healthcare costs for consumers by stopping deceptive businesses practices that raise prices and harm Americans.”
The complaint also alleges that this “Taxes & fees” charge is buried deep in the checkout process and is never clearly and conspicuously disclosed to consumers. According to the complaint, Lens.com has also used deceptive pricing practices in connection with its “AutoRefill” subscription plan, which automatically charges consumers for recurring shipments of contact lenses, the complaint alleges.
These deceptive pricing practices obscure the total price of contact lenses, preventing customers from determining what they will really pay and thus from being able to compare Lens.com’s prices against competitors’ prices, the complaint further alleges.
According to the joint complaint, Lens.com deceived consumers in the following ways:
- Lens.com prominently advertises eye-catching, artificially low prices in sponsored Google search ads and on its website, www.lens.com. In reality, the advertised prices bear little resemblance to what consumers ultimately pay for contact lenses because Lens.com imposes a mandatory, substantial “Taxes & fees” charge at checkout.
- Lens.com hides the “Taxes & fees” line item during the checkout process, hiding the line item below the viewable portion of the screen while encouraging consumers to click a prominent “Continue” button to proceed with the checkout process rather than scroll down. Consumers who click the “Continue” prompt never see the “Taxes & fees” line item at all.
- Lens.com also deceives consumers regarding the nature of the “Taxes & fees” charge. That label misleadingly suggests the charge includes state sales taxes. In fact, many states exempt contact lenses from state sales taxes or have no sales taxes at all, yet Lens.com uses the label “Taxes & fees” anyway.
- Lens.com uses these same deceptively low prices to induce consumers to enroll in AutoRefill, a negative option plan, and fails to clearly and conspicuously disclose the same hidden and misleading “Taxes & fees” charge before obtaining consumers’ billing information.
- Lens.com also fails to clearly and conspicuously disclose how to cancel the AutoRefill subscription and the deadline by which consumers must cancel to avoid incurring charges for a future shipment—burying that information outside of the AutoRefill purchase flow.
The FTC, Utah and Nevada allege these practices violate the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA), the Gramm-Leach-Bliley Act (GLB Act), the Utah Consumer Sales Practices Act (Utah CSPA), the Utah Automatic Renewal Contracts Act (Utah ARCA) and Nevada Deceptive Trade Practices Act (Nevada DTPA).
The Commission vote authorizing the staff to file the complaint was 2-0. The FTC filed the complaint in the U.S. District Court for the District of Nevada.
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.