Fitness Mobile App Company Settles With FTC Over False Promises, Improper Charges

Operators of a mobile app, which promised cash incentives to users who made fitness and nutrition goals, settled with the FTC and will pay $940,000, including refunds for allegedly billing tens of thousands of consumers without their consent, said the agency in a Thursday news release. Commissioners voted 2-0 on the complaint and stipulated final order, filed in the U.S. District Court for the Western District of Washington, which must still approve it. The FTC said Pact charged consumers even if they met their goals or canceled service. Pact and principals, Yifan Zhang and Geoffrey Oberhofer, violated the FTC Act and Restore Online Shoppers’ Confidence Act, said the commission. Consumers would get "more than $940,000 in earned cash rewards and refunds for improper charges as part of a $1.5 million judgment, the rest of which is suspended," said the FTC. The settlement prohibits the company from misrepresenting itself about rewards to consumers and from charging users "without their express, informed consent." Pact agreed not to use a negative-option billing feature, which treats a consumer's silence when given the option of canceling an offer as consent for being charged. The company didn't comment.