Pennsylvania Attorney General Settles with Telemarketer Over Do-Not-Call Violations

HARRISBURG, PA – Pennsylvania Attorney General Tom Corbett today announced that a Florida-based telemarketer will pay more than $90,000 to resolve more than 100 complaints that it illegally contacted consumers on the state’s “Do Not Call” list and/or charged consumers’ credit cards for goods or services including Buyers Club memberships without authorization.

Corbett’s Bureau of Consumer Protection entered into a legal agreement in Lackawanna County Court with ABI Marketing, Inc., 2340 State Road 580, Suite B, Clearwater, Fla., to resolve alleged violations of Pennsylvania’s Telemarketer Registration Act and Consumer Protection Law. The investigation involved complaints from consumers in every Pennsylvania County except Elk County.

According to agents with the Attorney General’s Office, ABI Marketing through 2003 contacted consumers by telephone to sell various goods or services including memberships into Buyers Clubs. Many consumers who received the solicitation calls were officially registered on the state’s “Do Not Call” list.

According to the consumers contacted, the telemarketers failed to identify themselves or the name, address and telephone number of the company on whose behalf they were calling. Failure to disclose identifying information at the beginning of a telemarketing call or at the consumers’ request is a violation of the state’s Telemarketer Registration Act.

Corbett said consumers also complained that they were misled about the purpose of the solicitation calls. Many were told that the calls were initiated to offer free coupons, certificates or other incentives as a “thank you” for a previous purchase. In reality, investigators said the calls were made to encourage the purchase of additional goods or services by offering them on a free trial basis.

Investigators said unbeknownst to consumers, the free trial offers included hidden processing fees or costs to use the free coupons or certificates. If consumers did not affirmatively reject the contracts during the free trial period, the various products and services were automatically charged to their credit or debit cards without their authorization.

The same “negative option” practice was used to charge consumers’ accounts for renewal fees that were included in the terms of the programs or memberships. “Negative option” offers are illegal because they force consumers to act in order to halt a sales transaction to avoid being charged.

Corbett said in still other cases, some consumers were charged for memberships or services even though they said they were not interested in the programs or products.

“This business is accused of defrauding more than 100 Pennsylvanians from the very beginning to the very end of its telephone solicitations,” Corbett said. “We have put a stop to the company’s widespread practice of misleading and deceiving consumers. Our legal action not only prohibits the company from doing business in violation of state laws, but it also levels the playing field for those who legitimately conduct telemarketing campaigns in the Commonwealth.”

Under the terms of the settlement, ABI Marketing is required to:

• Pay $69,800 in restitution to consumers who already filed complaints or wish to file a complaint before July 30, 2005 to report unauthorized fees and charges to their accounts.
• Pay $10,200 to the 102 consumers who filed “Do Not Call” complaints.
• Pay $10,000 in civil penalties.
• Comply with all provisions of the Consumer Protection Law and Telemarketer Registration Act.
• Provide clear and conspicuous disclosures of the sales, billing and renewal terms prior to charging consumers’ credit cards for any fees, goods or services.
• Disclose the purpose of the call, name of each seller, total costs of the purchase, billing information and authorization, plus refund, cancellation and exchange terms and conditions.
• Verify buyers’ authorization by an independent third party verifier including taped or recorded consumer responses.
• Provide a toll-free number for consumers to contact the company.

ABI Marketing is also required to cease transferring to any third parties consumers’ personal or financial data including billing information, Social Security number, date of birth, place of birth, mother’s maiden name, credit and income information.

Corbett said consumers who wish to file complaints in this case are asked to call 1-800-441-2555 or file electronically by visiting http://www.attorneygeneral.gov.

The agreement was filed in Lackawanna County Court. The case was handled by Senior Deputy Attorneys General E. Barry Creany and J.P. McGowan of Corbett’s Bureau of Consumer Protection.