Will Pay Civil Penalty to Settle Charges
International Masters Publishers Inc. (IMP), a Stamford, Connecticut-based company that sells informational cards on a variety of topics -- recipe cards, home repairs, gardening, sewing, sports, health and fitness, home decorating -- through a "continuity sales program," has agreed to pay a $60,000 civil penalty under a proposed settlement of Federal Trade Commission charges that it violated the debt collection provisions of a previous FTC order. The 1987 order prohibits IMP from misrepresenting the terms of its sales plan and from engaging in debt collection practices using threats of adverse consequences that are unlikely to occur.
IMP is the U.S. subsidiary of a Swedish parent company -- International Masters Publishers B.V. -- doing business in 15 countries.
In 1987, IMP entered into a consent agreement with the FTC settling charges that the company did not honor its membership cancellation requests or promptly credit the accounts of consumers who returned the cards. Instead, IMP had sent dunning letters to consumers, representing that legal action was about to be taken, when it was certain that no legal proceedings were to occur. IMP was ordered to cease and desist from misrepresenting any term or condition for cancellation of enrollment, return of merchandise, or any other customer right. IMP also agreed to cancel memberships and credit consumers for returned merchandise in a timely manner and not send additional merchandise after receiving a cancellation request. In addition, IMP was to send each new customer a notice explaining the company's return and cancellation policies. Finally, the order prohibits IMP from representing that a consumer’s credit ranking will be affected, or that other adverse consequences will result from failure to pay an amount claimed to be delinquent, unless there is reasonable likelihood that the threatened action will occur.
The complaint detailing the FTC's current charges alleges that, on numerous occasions, in violation of the 1987 order, IMP debt collection agents have represented directly or by implication that:
- lawsuits may or will be filed against consumers who fail to pay debts purportedly owed to IMP; and
- the names of consumers who fail to pay debts purportedly owed IMP would be referred to a credit reporting agency and the consumers’ credit ratings would be adversely affected.
The complaint further alleges that neither event was likely to happen.
The proposed settlement of these charges would prohibit IMP from violating any provision of the 1987 order. Also, under the proposed settlement, IMP has agreed to pay a civil penalty in the amount of $60,000.
The Commission vote to refer the complaint and proposed settlement to the Department of Justice for filing was 5-0. They were filed in the U.S. District Court for the District of Connecticut, in Hartford, on June 10, 1997, by the Department of Justice at the request of the FTC. The consent decree is subject to court approval.
NOTE: This consent order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent orders have the force of law when signed by the judge.
Copies of the complaint and proposed consent decree, as well as other documents associated with the 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 Docket No. C-3205)
(Civil Action No. 3:97 CV 1136(AVC))
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Justin Dingfelder or Louise Jung
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