Florida Consumers to Receive $3 Million in Refunds after XM Brands Fraud

Consumers thought they were getting a free trial of a dietary supplement or teeth whitening product, but instead, they found additional charges on their credit card for more products they didn’t order. Those consumers are getting $3 million in refunds, reports the online magazine Consumer Affairs, after the company, XM Brands agreed to settle deceptive marketing charges filed by the Florida Attorney General’s Economic Crimes Division.

The Hollywood, Florida-based company has received 1,143 complaints filed with the Better Business Bureau of Southeast Florida and the Caribbean. Consumer complain they gave their credit card only to pay for shipping and instead they were subjected to the “negative option” marketing that requires them to cancel after a specific period of time or else they will be enrolled in a membership program with automatic shipments and charges for additional products.

There is also some concern about the safety and efficacy of the products sold, as some complain the products have made them sick.

Consumers have until April 29, 2011 to file a claim with the Florida Attorney General’s Office. Additionally, the AG’s office will receive $51,000 from the company to cover the cost of attorneys’ fees and of an investigation, and XM promises to advertise in a way that does not defraud the consumer but lays out the terms and conditions of automatic renewals and shipments.

Florida law says a manufacturer is liable for a consumer’s injury if the product is unreasonably dangerous, or fails to perform as safely as a consumer would expect, or when the risk of danger in the design outweighs the benefits.

Though this is a consumer fraud case, if a consumer is injured by one of the XM Brand products, under Florida’s product liability law, the manufacturers, sellers, distributors, and designers can all be held liable for a defective product. Let Farah & Farah’s Florida product liability attorneys help you navigate the complex area of product liability and defective product law if you have been injured by a dangerous or defective product.