A California-based company that sells a sonic toothbrush kit has agreed to pay a $28,000 civil penalty to settle Federal Trade Commission charges that it violated the FTC's Mail or Telephone Order Merchandise Rule by failing to ship its product within the promised shipment time and failing to notify consumers of the delayed shipments. Amden Corporation nationally promoted the Cybersonic® Complete Sonic Oral-Care System - a sonic toothbrush kit containing interchangeable brushing, flossing, and tongue cleaning heads - in 30-minute infomercials and on the Internet. In addition to the civil penalty, the proposed settlement would prohibit the defendant from violating the Rule in the future.
The FTC's complaint names Amden, a Nevada corporation based in San Juan Capistrano, California. According to the complaint, Amden solicited orders for the toothbrush kits by mail, telephone, and on the Internet. Amden represented that consumers could pay for the $120 product in a single payment or in five monthly installments. Amden claimed that merchandise for buyers paying in a lump sum would be shipped in ten days. The company claimed that merchandise for buyers paying in installments would be shipped for delivery in three to four weeks.
The complaint alleges that, when Amden was unable to ship consumers' orders within the promised shipment time, it failed to notify the consumers and request their agreement to delayed shipment. It then allegedly failed to cancel the delayed orders and promptly refund the buyers' money.
The Mail or Telephone Order Merchandise Rule covers merchandise ordered by mail, telephone, facsimile, or the Internet. It requires merchants to have a reasonable basis for their shipment representations. If merchants are unable to ship in the promised time (or in 30 days, if no time is promised), they must, within that time, notify buyers and request their agreement to the delay. If they fail to ship or send the delay notification in time, they are required, automatically and without being asked, to cancel the order and make a prompt and full refund.
In addition to imposing a $28,000 civil penalty, the proposed consent decree would prohibit the defendant from violating the Rule in the future. It would require that Amden provide consumers with timely notifications of delay or prompt and full refunds when it cannot ship in time. The proposed settlement also would require Amden to provide a compliance report to the FTC within 120 days of entry of the consent decree.
The Commission vote to authorize staff to refer the complaint and proposed consent decree to the Department of Justice for filing was 5-0. The Department of Justice, at the FTC's request, filed the complaint and proposed consent decree in the U.S. District Court for the Central District of California on April 18, 2002. The proposed consent decree is subject to court approval.
NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees have the force of law when signed by the judge.
Copies of the complaint and consent decree 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.
(FTC File No. 012-3118)
(Civil Action No. CV02-3186)
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