FTC, Fla. Claims Barred by FDUTPA Statute of Limitations, Say Defendants

The FTC and Florida failed to adequately allege any required elements of their claims, said defendants Chargebacks911 and Gary Cardone and Monica Eaton, owners of parent company Global E-Trading, in a Thursday reply (docket 8:23-cv-00796) to the FTC’s opposition to their motion to dismiss in U.S. District Court for Middle Florida in Tampa. Also, defendants said, Florida Deceptive and Unfair Trade Practices Act (FDUTPA) claims are barred by the four-year statute of limitations and involve conduct that's “explicitly excluded from the FDUTPA under the Banking Activity Exception." Under both the FDUTPA and Section 5 of the FTC Act, an act is unfair when it causes or is likely to cause substantial injury to consumers, isn't reasonably avoidable by consumers, and isn't outweighed by countervailing benefits to consumers or competition, defendants said, citing FTC v. Roca Labs. Plaintiffs failed to meet their burden of plausibly alleging anyone was harmed by CB911’s representment packages or CB911’s value added promotions, said the reply. The FTC and Florida’s April complaint alleges (see 2304130013) Chargebacks911 allowed its clients to run “microtransactions” via prepaid debit cards that artificially lower a merchant’s overall chargeback rate by inflating the total number of transactions running through the merchant’s account, thus lowering the percentage of their charges that were disputed by consumers. Cardone and Eaton used “multiple unfair techniques” to prevent consumers from winning chargeback disputes over unwanted, fraudulent or incorrect credit card charges, said the complaint. The complaint “traces a straight line” from defendants’ misconduct to consumer injury, plaintiffs said in their opposition to a motion to dismiss. Consumers reported to their banks they had been charged without their knowledge and consent, said the response. Defendants submitted representments purporting to show consumers knew about and consented to the charges; as a result, “banks likely have been misled into denying the consumers’ valid chargebacks,” said the FTC.