Companies Selling Ads in "Minority Publications" Settle FTC Charges

In three separate recent actions, the Federal Trade Commission has settled charges against companies engaged in the deceptive sale of "equal employment opportunity" advertisements. The defendants market these advertisements to businesses, schools, government agencies, and other entities, and represent that the ads will appear in publications geared to minority or other specific demographic groups. The FTC alleged that the defendants made numerous misrepre-sentations to their victims - primarily that the entity owed the defendants money based on a prior purchase of, or agreement to purchase, advertising in their publications and that the defendants misrepresented the nature of the previous business relationship with the entities. Two of the complaints also alleged that the defendants misrepresented that circulation or dissemination was targeted to specific demographic groups. Under the settlements of the charges, the defendants must obtain prior written authorization for all future advertising orders and provide affirmative disclosures regarding the nature of their advertising and their prior contacts with the customer.

The three FTC complaints name: 1) United Media Publishing Group, and its owner, Mansour Pourmand; 2) Blair Publications Group and its owner, Martin Cohen; and 3) E.M. Publishing Enterprises, Inc. and its owner Jeff Palmatier. All three companies are based in Southern California.

United Media Publishing Group

United Media Publishing Group, which operated in Los Angeles and Canoga Park, California, published periodicals in an online-only format beginning in 1999, according to the FTC's complaint. Previously, it published print editions, including Black Employment & Education Journal, Black Progress Review, El Tiempo Latino, and National Jewish Life. The cost of United Media's ads typically ranged from $295 to $495.

The FTC complaint filed in U.S. District Court alleges that the defendants misrepresented that:

• Entities already had purchased, or agreed to purchase, the ads in their publications and that payment was owed;
• Entities previously purchased ads from them before and that the ads were up for renewal;
• The circulation or dissemination of the publication was targeted to specific demographic groups; and
• Placing an ad in defendants' publications would fulfill obligations under equal employment opportunity laws.

Blair Publications Group

Based in Calabasas, California, Blair Publications Group disseminated various publications, including Veteran Recruiter, Black American Press, and Hispanic Observer. The cost of the defendants' ads range from a few hundred to a few thousand dollars.

The FTC complaint filed in U.S. District Court alleges that the defendants misrepresented that:

• Entities already had purchased or agreed to purchase the ads in their publications and that payment was owed;
• Entities previously purchased ads from them and that the ads were up for renewal; and
• The circulation or dissemination of the publication was targeted to specific demographic groups.

E.M. Publishing Enterprises

E.M. Publishing has operated from Tarzana, California, since at least 1998. Its publications include Hispanic Today, The Black Perspective, and Jewish Business Quarterly. The cost of ads appearing in the publications typically runs from a few hundred dollars to a few thousand dollars.

The FTC complaint filed in U.S. District Court alleges that the defendants misrepresented that:

• Entities already had purchased or agreed to purchase the ads in their publications and that payment was owed; and
• Entities previously purchased ads from them before and that the ads were up for renewal.

The stipulated final judgments and orders entered in each of these cases require the defendants to pay $50,000. In addition, the orders prohibit the defendants in each of these cases from: misrepresenting that any business, school, agency, or other entity has ordered, purchased, or agreed to purchase and place advertisements in a publication; misrepresenting that an entity owes a payment; misrepresenting a prior business relationship with customers; misrepresenting that the circulation of a publication is targeted to a specific demographic group; and misrepresenting any affiliation with, or connection to, any government agency or that advertising with them will fulfill any equal employment opportunity laws. In addition, the settlements prohibit the defendants from misrepresenting any other fact likely to affect a customer's decision in connection with the purchase of any advertising, and prohibit the defendants from selling or transferring their customer lists.

The settlements also require the defendants, before sending an invoice or request for payment, to obtain prior written authorization for all advertising orders. In addition, the settlements require that the defendants provide affirmative disclosures regarding the circulation of the publication and the number of previous orders the customer previously placed. The settlements also contain various recordkeeping requirements to assist the FTC in monitoring the defendants' compliance.

The Commission votes to authorize the staff to file the complaints and stipulated final judgments with respect to United Media Publishing, Blair Publications Group, and E.M. Publishing Enterprises were each 5-0. The investigation was conducted by the FTC's Western Region - Los Angeles, and the actions were filed in the U.S. District Court, Central District of California, Western Division. The court approved each of the settlements.

NOTE: These stipulated final judgments are settlement purposes only and do not constitute an admission by the defendants of a law violation. Stipulated final judgments have the force of law when signed by the judge.

Copies of the complaints and stipulated final judgments are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.