Utah has joined the Federal Trade Commission and the Nevada attorney general in a suit to stop what they contend is a long-running deceptive pricing scheme run by contact lens retailer Lens.com Inc.
In a joint complaint, the plaintiffs allege that Lens.com, along with 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. The Utah Department of Commerce’s Division of Consumer Protection was represented by the Office of the Utah Attorney General in the matter.
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.
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.
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 obscures 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 tax or have no sales tax at all, yet Lens.com still uses the label “taxes & fees.”
• 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 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.
Utah, the FTC 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 the 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.
