FTC serves health-app maker massive slice of humble pie—and $1.5M bill

By Beth Mole

The idea was that Pact app users would set their own goals for going to the gym, exercising, logging their food, and/or eating veggies each week. Users agreed to be automatically charged if they didn’t meet any of their weekly goals. The users themselves selected their own monetary punishment, with charges ranging from $5 to $50 for each broken pact. If the users met their goals, they were promised that they would be paid a share of the money collected that week from pact-breaking users.

The FTC has announced that the maker of the app, Pact Inc., agreed to a $1.5 million judgement. Nearly $1 million will go to users as refunds and unpaid rewards. Pact has 30 days to fork over the dough.

Along with the settlement announcement, the FTC released its full complaint against Pact (PDF). The complaint outlines how the app was supposed to work and how it allegedly went terribly wrong.

According to the FTC, Pact failed to acknowledge when users met their goals and charged them without authorization. Users that suspended or canceled their service or straight-up deleted their entire account continued getting charged—often hundreds of dollars.

Read full article and learn more about Deceptive Advertising here.

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Disclaimer: This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.