Court Rules
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SettlementHigh Risk

FTC Settles with NGL for $4.5M Over Deceptive Marketing to Minors

Penalty Amount

$4,500,000

Summary

The FTC settled with NGL for deceptively marketing its anonymous messaging app to children and teens, using fake messages to trick users into paid subscriptions without proper consent. The order banned marketing to users under 18 and required $4.5 million in refunds for unauthorized charges.

Remedy

The order bans NGL from marketing anonymous messaging apps to children and teens under 18 and requires the payment of $4.5 million to refund unauthorized charges to users.

BanMonetary PenaltyConsumer Refunds

Contract Impact

In-house legal teams should review all customer-facing agreements, particularly terms of service and subscription agreements for apps or services accessible to minors. Focus on clauses governing marketing practices (especially those targeting users under 18), consent mechanisms for recurring payments and subscriptions, age verification procedures, and refund policies for unauthorized or deceptive charges. Given the COPPA violation, any agreement involving the collection of personal information from children under 13 must include verifiable parental consent provisions. Changes may be needed to implement robust age-gating, separate consent flows for minor users, clear disclosure of subscription terms and cancellation policies, and a streamlined refund process for unauthorized transactions.

Contract Search Terms

fake message marketingrecurring subscription consentunauthorized charge clauseminor consent requirementage verification mechanismmarketing to minors prohibitionrefund policy for unauthorized chargesparental consent for subscriptions

Laws Cited

COPPA

Violation Types

Entity Details

Entity

NGL

Industry

Technology

Official Sources

Source Evidence

Entity Name
"NGL customers"
Fine Amount
"$4.5 million"
Laws Cited
"Children's Online Privacy Protection Act (COPPA)"
Violation Types
"unfairly marketing the service to children and teens"
Violation Types
"failed to obtain consent for recurring charges"
Event Date
"In July 2024"

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