Facebook blocks LuxStyle beauty product ads that customers say are a scam

Facebook has blocked advertising from a beauty products company that customers say sends them products they haven't ordered, then demands payment.

Denmark-based Lux International, also referred to as LuxStyle, has been the focus of numerous complaints from consumers due to the company's ordering process.

Facebook originally told CBC it was "investigating" the complaint, but after our story was published on Wednesday, the company said it would no longer allow any advertising from LuxStyle.

"We determined that these ads violated our policy against deceptive claims and business practices, and have blocked the company from advertising on Facebook going forward," a spokesperson with the social media giant said. "We apologize to anyone who was inconvenienced."

CBC earlier reported that Canadian Kim Mills said she clicked on an ad on Facebook for LuxStyle foot detox pads, and was taken to the beauty company's website. She couldn't read about the products or see pricing information until she filled out a form with her name and address, so she submitted her info. 

Mills said she exited the website after reading about the products because she didn't want to place an order.

"Then all of a sudden we got a package in the mail from them. I never ordered it. I never said I wanted it. I never checked a box where it said 'Would you like this product?' or anything like that."

Mills received an initial invoice for $59.85, followed by others that added $10 late fees. The last bill she received was for $89.85. The company threatened legal action if she did not pay.

"[I'm] very concerned because it's my credit rating that's going to go down because of them," Mills said.

Western University student Ocean Enbar said he had the same experience, but didn't think it necessarily was a scam — just an unusual business strategy.

"I'm assuming their profit margins on the products are insane and they don't mind the risk of not getting paid for most of them — and they're just hoping that most people get scared and pay for it," Enbar said. "At the end of the day it's a smart tactic, but it's not an ethical one."

He joined a Facebook group of people sharing similar stories and encouraging each other not to pay. 

The European Consumer Centre in Finland says it tested LuxStyle's ordering process and claims it is "highly defective."

The Australian Competition and Consumer Commission says it received 127 complaints about Lux International between January and March 2017.

In a public warning statement Tuesday about LuxStyle, ACCC deputy chair Delia Rickard said the agency "is very concerned that consumers are reporting that, in response to demands from LuxStyle, they have paid for goods that they did not order and do not want."

The Danish Consumer Ombudsman also investigated LuxStyle's conduct.

'Nice people in Canada … intimidated'

Bruce Cran, president of the Consumers' Association of Canada, said Canadians aren't responsible for unsolicited goods that arrive on their doorstep. However, he says he often hears stories about people feeling pressured to pay in similar situations.

"What surprises me is the inability for people to deal with it," Cran said. "I think it's a case of very nice people in Canada and we're easily intimidated."

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Cran said companies should not send products without receiving a customer's payment information first.

"It's not a very good business practice, and it certainly doesn't have any legs for making a profit. These days, just about everything on the internet is done on a credit card or credit of some type."

Lux International denies allegations

In an interview with CBC News, the CEO of Lux International, Jacob Mathiesen, says he's aware of claims that his company is operating a scam, but he says that is "by no means the case."

He says LuxStyle gets approximately one million orders per year. He claims the number of complaints about the company is relatively small. Mathiesen also says the problems described are being blown out of proportion.

"I have explicitly, of course, looked into this matter very carefully," said Mathiesen, who joined Lux International as its CEO on March 1 "to help them clean up this company."

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Mathiesen defends Lux International's ordering process, and suggests that customer complaints are due to confusion.

"I think that the majority of these people did not really realize that they ordered a product when they press the order button," Mathiesen said.

But Kim Mills says there was no "order button" when she viewed the website. CBC News was unable to verify Mills' order process because LuxStyle says it no longer has campaigns for detox foot pads in Canada.

"It's a scam to me. They don't ask you if you want the product, they just send it," Mills said. "I'm not paying for them."

For Facebook, yet another problem

The ads draw more negative attention to the issue of what's popping up in people's Facebook news feeds, from violent videos to fake news stories.

Facebook said it takes the quality of ads it allows on its social media platform very seriously. The company uses both automated and manual tools to enforce its ad policies.

Online scams are an ongoing problem in Canada, from counterfeit merchandise to goods that never show up, fake websites and free-trial traps. Canadians lost $8.6 million online last year, according to the Competition Bureau.

"I see no interest on the part of the governments or the internet service suppliers to try and stop it," Cran said. "We just got to strengthen our spines and take this remedy into our own hands."

If you receive something you don't order, Cran says, you don't have a responsibility to send it back.

"You can throw it in the garbage can," he said.