Information and Alerts

Government Actions

FTC v Urthbox

On April 3, 2019, Urthbox, Inc. and its Principal, Behnam Behrouzi, reached a settlement with the Federal Trade Commission in regards to three violations of the Federal Trade Commission Act (FTC Act) and one violation of the Restore Online Shopper’s Confidence Act (ROSCA,) file no. 172-3028.

From October 2016 to November 2017, Urthbox offered consumers a free trial of their snack box, charging only the normal shipping and handling fee. Upon signing up for the free trial, Urthbox automatically enrolled consumers into a six-month subscription of the snack box. Depending on the size of the box selected for the free trial, the cost of the subscription ranged from $77 to $269. Urthbox did not clearly disclose the terms associated with the free trial box or that the consumer would automatically be enrolled in the six-month subscription at the time of order. Consumers were charged for the six-months upfront unless they cancelled their subscription before the billing date. On or around February 2017, Urthbox added hyperlinked information to the “Terms and Conditions” and “FAQs” page about the subscription terms. Consumers were not required to click on these hyperlinks to obtain a free snack box. Consumers were also unlikely to click on these hyperlinks because as labeled they failed to convey the importance or relevance of the information to which they lead.

From January 2017 to November 2017, Urthbox conducted an incentive program for consumers to leave positive reviews of their products in exchange for a free snack box. Consumers were directed to third-party sites, such as the BBB website and Trustpilot.com, where they would leave positive reviews then submit proof via email and be shipped out their free snack box. These reviews were made to seem like they were independent reviews as they did not disclose that Urthbox offered consumers a free snack box for the review.

The FTC alleges that Urthbox violated FTC Act’s by failing to disclose negative options terms, making false claims of independent reviews and failing to disclose material connections. FTC also alleges that Urthbox violated ROSCA by failing to obtain consumer’s express informed consent to the negative option feature and/or informing them before obtaining consumer’s billing information.

In the settlement Urthbox is barred from engaging in any similar conduct and required to pay the FTC $100,000 to compensate affected consumers.

The FTC will mail 2,221 refund checks totaling $84,000 to consumers. Starting December 9, 2019, Analytics, Inc. the refund administrator for this matter, will being mailing checks. The average check amount is $37.84, and it must be cashed within 60 days, as indicated on the check. Consumers who have questions regarding the mailing should call 1-844-954-1251.