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Note: If you’ve never heard of Jesse Willms, you should read our earlier posts for some context:

For the last few months, we’ve been patiently waiting to see how the Federal Trade Commission would handle their complaint against Jesse Willms (see documentation here).

On Thursday, February 23, 2012, Jesse Willms reached a $359 million settlement with the FTC. This settlement will be dropped if Willms gives up all the money is his bank accounts and returns money from the sale of his house and other personal property.

According to MSNBC’s coverage, “Willms and his 11 companies are barred from using an negative-option marketing, a practice where the seller considers the lack of a response from the customer as permission to charge them.”

Jesse Willms’ “risk-free” trial offers included colon cleaning supplements, weight loss products, teeth-whiteners and the infamous penny auction SwipeBids. It is estimated that Willms’ companies pulled in over $450 million through these schemes.

In response to this settlement, Willms’ released a statement saying:

“We are working to resolve issues relating to past marketing practices for products that our company no longer sells,” … “Through this process, we have taken steps to assure that our business practices are in full compliance with the law.”

Five other individuals also reached separate settlements with the FTC (more on that here and here).

There are two obvious morals to this story:

  1. If you are a business owner, ripping people off on a large scale will eventually catch up to you.
  2. If you are a consumer, you should ALWAYS read terms and conditions before agreeing to anything.