The stars! The bling! And oh, that red carpet! The award season has arrived. Last week it was the Golden Globes. Next up: the SAG (Screen Actors Guild) Awards. And then the little golden man called Oscar will be here to brightens the dull days of February. But not everyone is winning.
Both celebrities and their fans are losing as con artists continue to scam consumers by offering fake endorsements for “free” trial products. Big names like Miranda Lambert, Ellen DeGeneres, Nicole Kidman, Leonardo DiCaprio, Gwen Stefani, and others have been used to falsely endorse products.
The gist of the scams goes like this: a celebrity endorsed “miracle” product for free or a nominal fee. The reality: hidden fees for recurring product shipments or subscriptions that end up costing consumers hundreds of dollars. The kicker: the celebrity never endorsed the product in the first place.
The scams often appear on social media sites like Facebook and Instagram and language about fees is buried in fine print or in another difficult-to-find-spot. Many celebrities are now speaking out, warning fans not to purchase items they haven’t clearly endorsed.
The Better Business Bureau recently performed an in-depth study titled “Subscription Traps and Deceptive Free Trials Scam Millions with Misleading Ads and Fake Celebrity Endorsements”. It examined how the free trial offers mislead consumers using “subscription traps” that ensnare them for expensive shipments of products they never explicitly agree to buy. Once a consumer has input their credit card information and is unknowingly signed up for recurring product shipments, many say it is difficult to contact the merchant and stop those shipments.
The BBB has received nearly 37,000 complaints and Scam Tracker reports over the last three years about fake celebrity-endorsed products and trial offers (though not all these complaints involve people losing money). The Federal Trade Commission is already seeing an increase in reports of free trial scams. From 2015 to 2017, the number of consumer complaints about the scam doubled. Additionally, victims in 14 resolved FTC cases collectively lost $1.3 billion. Consumers making reports to BBB lost an average of $186.
An examination of the BBB complaints and reports found that victims span all income and education levels, while a review of complaints to the Internet Crime Complaint Center (IC3) from 2015 to 2017 shows an even spread of age ranges. However, the BBB report indicates that 72 percent of victims were female, likely because many free trial offers involve skin care products geared toward women.
So how do we prevent consumers from falling victim to fake endorsements with very real financial consequences? The BBB has a few ideas:
• Credit card companies need to do more to ensure victims receive chargebacks when key conditions are not adequately disclosed. Because this fraud is dependent on the use of credit cards, more effort is needed to identify and combat deceptive free trial offers employing credit card systems.
• Additional criminal prosecution of this conduct is needed. The FTC and BBB have done much to address the issue, but do not have the ability to bring criminal charges. Only criminal prosecutions are likely to deter this type of fraud.
• Social media sites should do more to prevent deceptive advertising.
• International cooperation is needed to combat this fraud. U.S. and Canadian law authorities need more information about victims from other countries.
So as celebrities walk the red carpet on your television and telephone this awards season remember, they didn’t get that dewy glow, perfectly coiffed hair, or striking physique by using a shady product they didn’t actually promote on social media.
If you’ve been scammed, report it! Visit bbb.org/scamtracker