|January 6, 2011
Contact: Whitney Ray
Phone: (850) 245-0150
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TALLAHASSEE, FL – Attorney General Pam Bondi today announced an agreement with XM Brands, d/b/a XM LABS, LLC, settling allegations of deceptive marketing practices. XM, a Broward County company, sells non-prescription dietary aids, nutritional supplements, teeth-whitening, and other products over the Internet. The settlement resolves issues related to XM’s trial offers, automatic subscription renewals, and automatic shipments.
The Attorney General’s Economic Crimes Division began investigating XM in December 2009 when consumers complained that they received and were billed for products they did not order. The investigation revealed that acceptance of XM’s trial product offer triggered a negative option agreement which imposed automatic monthly shipments and reoccurring costs associated with receiving the trial products.
XM Brands and its directors have fully cooperated with the Attorney General’s Office and have already reimbursed or assisted in the reimbursement of approximately $3 million to consumers nationwide. Consumers who have not yet been reimbursed, have until April 29, 2011 to file a claim with the Attorney General’s Office.
As part of the settlement, refunds will be offered to Florida consumers who were enrolled in a trial offer, automatic renewal or automatic shipment plan online. In addition to consumer refunds, the companies will pay approximately $51,000 to the Attorney General’s Office for attorneys' fees and costs and for future investigation and enforcement. XM agrees to advertise in a way that clearly and conspicuously tells consumers about the terms and conditions of its plans and ensures that consumers have agreed to automatic renewals and automatic shipments before enrolling them in such programs.