Crap cracked fat-attack Pact app chaps slapped in pact backtrack infract

US watchdog raps breach-of-contract brats for retracted transacts


Defunct mobile app company Pact broke its pact with customers to pay them promised cash incentives, US trade watchdog the FTC said on Thursday.

Pact, which shut down in July, described itself as a 15-person San Francisco startup on its website. Few if any people remain.

According to the FTC, the Khosla Ventures-funded startup was incorporated in Delaware and, the last time anyone checked, based in Seattle, Washington.

The agency filed a complaint against Pact and its two co-founder executives – Yifan Zhang, CEO, and Geoffrey Oberhofer, COO – and simultaneously announced details of a settlement.

From about 2012 until this summer, the company peddled a mobile app, originally called GymPact and by 2014 just Pact, that aimed to encourage users to meet fitness and nutrition goals. It did so by inviting these naïfs to make a pact – a formal agreement – to exercise a specific number of times a week or to eat specific things.

Pact app screenshot

Those who failed to meet their pacts agreed to be charged automatically some amount in the range of $5 to $50, while those who succeeded in meeting their goals were to receive a share of the failure funds, with Pact collecting the remainder.

But the company did not take its name very seriously.

"Unfortunately, even when consumers held up their end of the deal, Pact failed to make good on its promises," said Tom Pahl, Acting Director of the Bureau of Consumer Protection, in a statement.

The FTC complaint indicates that the app biz regularly violated its commitments to users by doing just the opposite of what was promised.

"At least tens of thousands of consumers have complained to Defendants that they were charged rather than paid for completing a pact," the complaint says. "A payment processor and a bank with which Defendants worked warned Defendants about the app's high chargeback rate, and the company was fined by a financial institution for exceeding Visa's permitted chargeback rate for six consecutive months."

Pact doubled down on its claims by expanding the app to include pacts with third-party partners. Again, the complaint says, Pact charged people who completed their pacts rather than paying them, even as it acknowledged its failure to register progress toward goals in third-party apps as a "known issue."

Recounting a litany of other issues such as unwarranted charges and refusal to provide refunds, the complaint charges Pact with deceptive acts, unfair billing practices, violations of the Restore Online Shopper's Confidence Act (ROSCA), failure to disclose material terms, and consumer injury.

Under the terms of the $1.5m settlement, Pact is obligated to refund $940,000 to its customers over the next 30 days. The balance of the penalty is suspended unless the various representations made by the defendants are found to be untrue.

Attempts to reach Zhang at her new company Loftium and Oberhofer, through Pact, went unanswered. Several former employees, presently at other companies, also did not respond to requests for comment. ®

Broader topics

Narrower topics


Other stories you might like

  • Tesla driver charged with vehicular manslaughter after deadly Autopilot crash

    Prosecution seems to be first of its kind in America

    A Tesla driver has seemingly become the first person in the US to be charged with vehicular manslaughter for a deadly crash in which the vehicle's Autopilot mode was engaged.

    According to the cops, the driver exited a highway in his Tesla Model S, ran a red light, and smashed into a Honda Civic at an intersection in Gardena, Los Angeles County, in late 2019. A man and woman in the second car were killed. The Tesla driver and a passenger survived and were taken to hospital.

    Prosecutors in California charged Kevin George Aziz Riad, 27, in October last year though details of the case are only just emerging, according to AP on Tuesday. Riad, a limousine service driver, is facing two counts of vehicular manslaughter, and is free on bail after pleading not guilty.

    Continue reading
  • AMD returns to smartphone graphics with new Samsung chip for your pocket computer

    We're back in black

    AMD's GPU technology is returning to mobile handsets with Samsung's Exynos 2200 system-on-chip, which was announced on Tuesday.

    The Exynos 2200 processor, fabricated using a 4nm process, has Armv9 CPU cores and the oddly named Xclipse GPU, which is an adaptation of AMD's RDNA 2 mainstream GPU architecture.

    AMD was in the handheld GPU market until 2009, when it sold the Imageon GPU and handheld business for $65m to Qualcomm, which turned the tech into the Adreno GPU for its Snapdragon family. AMD's Imageon processors were used in devices from Motorola, Panasonic, Palm and others making Windows Mobile handsets.

    Continue reading
  • Big shock: Guy who fled political violence and became rich in tech now struggles to care about political violence

    'I recognize that I come across as lacking empathy,' billionaire VC admits

    Billionaire tech investor and ex-Facebook senior executive Chamath Palihapitiya was publicly blasted after he said nobody really cares about the reported human rights abuse of Uyghur Muslims in China.

    The blunt comments were made during the latest episode of All-In, a podcast in which Palihapitiya chats to investors and entrepreneurs Jason Calacanis, David Sacks, and David Friedberg about technology.

    The group were debating the Biden administration’s response to what's said to be China's crackdown of Uyghur Muslims when Palihapitiya interrupted and said: “Nobody cares about what’s happening to the Uyghurs, okay? ... I’m telling you a very hard ugly truth, okay? Of all the things that I care about … yes, it is below my line.”

    Continue reading

Biting the hand that feeds IT © 1998–2022