Payment Processor Caught in the Web of Allegedly Illegal “Free Trial” Scheme


  • The FTC reached a settlement with overseas payment processor SIA Transact Pro and its former Chief Executive Officer (collectively “SIA”) to settle allegations that it enabled U.S.-based defendants to market deceptive “free trial” offers in violation of the FTC Act, the Restore Online Shoppers’ Confidence Act, and the Electronic Funds Transfer Act.
  • The FTC’s amended complaint alleged that SIA illegally maintained merchant accounts in the name of shell companies for U.S.-based defendants who marketed personal care products and dietary supplements with free trial offers but still billed consumers the full price and enrolled them in continuity plans without their consent. The amended complaint also alleged that SIA enabled the U.S.-based defendants to evade credit card chargeback monitoring programs.
  • Under the terms of the final order, SIA is enjoined from the conduct alleged in the amended complaint and from payment processing activities relating to certain categories of merchants, including those selling or promoting dietary supplements, drugs, or cosmetics. In addition, SIA agreed to pay a $3.5 million judgment, which the FTC may use to issue refunds to consumers who were defrauded by the free trial scheme.