The Federal Trade Commission announced today that it has distributed funds out of a $292,500 redress account to 2,682 consumers across the nation who were victimized as part of a telemarketing scheme in which the defendants allegedly were trafficking in consumers’ credit card numbers. According to the FTC, the victims had agreed only to use a 3D camera on a free-trial basis, but the defendants already knew the consumers’ credit card numbers and each of the consumers’ accounts was charged without their knowledge or authorization. The FTC obtained a settlement in the case against 10 corporations and four individuals. The settlement required the $292,500 redress payment and these funds have been used to send checks for $93.34 each to the consumers who suffered the largest losses at the hands of the defendants.
The FTC first announced the case in December 1994, when it filed both a complaint detailing alleged law violations and a settlement of those charges in federal district court. The FTC’s complaint names Capital Club of North America, Inc.; Philip A. Herman Marketing Consultants, Inc.; List Marketing Management, Inc.; Subscription Services, Inc.; National Media Corporation; Media Arts Publications, Ltd.; Business Publications, Inc.; GLS Direct, Inc.; NIS of South Jersey, Inc. (both the New Jersey and Florida corporations); Philip A. Herman; Michael Salaman; Ross Housley and Rocco Petrucelli. The defendants do business primarily out of New Jersey and Pennsylvania.
The FTC charged in the case that National Media and Media Arts, both infomercial producers, sold or rented their customer lists to third-party “service companies.” The lists contained not only the customers’ names, addresses and telephone numbers, but also their credit card types, account numbers and expiration dates, and this credit information was provided to the service companies without the consumers’ knowledge or consent. The roles of the other defendants included maintaining the lists, marketing them to service companies, and conducting telemarketing calls on behalf of the service companies, the FTC alleged.
In addition to the redress payment, the settlements in the case permanently bar the defendants from providing confidential credit-card account information to third parties, and require them to take steps to ensure that future clients for other credit-related lists are not engaged in deceptive or unfair practices.
Consumers receiving pro rata refunds were called on the phone and offered a 3D camera with the brand names Nishika, National Consumers Alliance or 3D Marketing, on a free-trial basis. Consumers do not have to return the camera in order to get their refund, although consumers who already have received refunds from other sources will not receive refund checks from the FTC.
Copies of the legal documents in this case are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580: 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it happens, call the FTC’s NewsPhone at 202-326-2710. FTC news releases and other documents also are available on the Internet at the FTC’s World Wide Web Site at http://www.ftc.gov
(FTC File No. 922 3355)
(Civil Action No. 94-6335; U.S. District Court for the District of New Jersey, Trenton)