Two marketing companies that sell a slew of products familiar to anyone who has ever been depressed enough to watch non-DVR’d basic cable at 2 a.m. — like the Genie Bra, Ab Coaster, Wonderhanger, and Total Pillow — have agreed to pay a total of nearly $900,000 to settle allegations that their ads misled shoppers about the real price of the products they were selling.
The office of New York state Attorney General Eric Schneiderman announced this morning that it had reached deals with New Jersey-based Tristar Products (the folks behind the aforementioned brasier and ab exerciser) and Vermont’s Product Trend (which markets Furniture Fix, in addition to its loudly touted hangers and pillows).
The settlements came about as a result of complaints to — and subsequent investigation by — the Consumer Frauds Bureau of the NY AG’s office.
Among the allegations raised by investigators: that consumers were being misled by “Buy One, Get One” offers for certain products. What the ads failed to adequately disclose, says Schneiderman, is that customers had to pay two separate shipping and handling fees for each of the items in the BOGO offer. Additionally, shoppers may not have been told what those fees were.
According to investigators, people who placed orders online or by phone were not given the opportunity to review their order before payment was processed, resulting in shoppers sometimes paying significantly more than they expected.
The AG’s office has provided a couple of examples to illustrate the claims against the two companies.
One customer says they saw a Buy One/Get One ad for Total Pillow with a price of $19.99 plus shipping and handling, yet somehow ended up being charged $91.73.
A Genie Bra customer saw an ad touting a $19.99 “Buy 3, get 3” deal, but was charged $101.83 in the end. Even after returning the bras, investigators say Tristar refused to refund the shipping and handling fees.
Tristar — which has agreed to pay $700,000 in restitution, penalties, costs and fees — also faced allegations of making if difficult for customers to file warranty claims for malfunctioning products.
Product Trend has agreed to pay a total of $175,000 to close the book on the state’s investigation.
In addition to the financial penalties, the two companies are required to:
• Clearly and conspicuously disclose all material terms of an advertised offer.
• Clearly and conspicuously disclose the amount of any processing and handling fee for the second item in a “Buy One, Get One” offer.
• Provide consumers with an opportunity to confirm the details and the total price of any order before it is processed. For orders placed online, this includes presenting the consumers with a checkout or shopping cart page that the consumer can edit.
• Disclose the amount of any processing and handling fees during the ordering process before the consumer is asked to confirm the order details.
• Label all hyperlinks to clearly convey the consequence of clicking the link.
• Email consumers who place orders by phone an order summary with any processing, handling or other charges.
• Ensure that the marketers’ customer service lines are adequately staffed so that consumers are not subjected to long hold times.
“These agreements insure that consumers will not be hit with charges they did not authorize and will not be frustrated with long hold times or unresponsive customer service when they seek assistance,” Attorney General Schneiderman said. “The settlements also bring much needed reforms to two major players in the direct marketing industry and insure that consumers will have a clear understanding of the charges before they place an order.”
by Chris Morran via Consumerist
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