UNITED STATES OF AMERICAN
FEDERAL TRADE COMMISSION
WASHINGTON, DC 20580

Seattle Regional Office

August 7, 1997

We originally expected to have all refund claims due in by June 30, 1997, and refunds processed and mailed in July or early August. Unfortunately, several problems arose.

First, Fortuna was very slow in providing membership data. This meant we had to do a second mailing to members, with an August cutoff date for them to file claims. Then we saw that the refund claims would exceed the amount of money on hand to pay all claims in full. The FTC has $3.1 million from Fortuna. The total of claims is approaching, and may exceed, $5 million. The Stipulated Final Judgment requires Fortuna to make additional funds available to pay all claims. However, we don't know when Fortuna will pay this money over to the Redress Contractor. We can't just start making payments to some people and then risk running out of funds.

Finally, Fortuna has notified the FTC of challenges to many refund claims. Fortuna is still reviewing its challenges. Some challenges are because Fortuna believes the member already received a refund or advance that covered the initial fee. However, Fortuna also challenges all refund requests for Premier and Ambassador membership fees. The FTC believes that the Stipulated Final Judgment provides refunds for all membership fees. If necessary, we will dispute Fortuna's position in court.

When we can start making refund payments depends on how soon we can resolve Fortuna's challenges and how soon Fortuna pays the additional amount needed for refunds. If we do not receive the money from Fortuna promptly, we may ask the court for permission to make partial payments on a pro rata basis. This process could take another 60 days to complete.

If you have questions about the process, you can Email the FTC at "fortunacase@ftc.gov" . Please don't ask questions about individual claims via this Email address. The Redress Contractor is handling the processing of all claims.