Defendant to Post $100,000 Bond Before Engaging in Telemarketing and To Post $500,000 Bond Before Engaging in Negative Option Sales
Bruce Turiansky, an officer of Triad Discount Buying Service, Inc. and numerous related companies (Triad), has agreed to settle Federal Trade Commission charges that he played an integral role in misleading consumers into accepting discount buying club memberships and deceptively obtaining consumers' billing information through telemarketers without the consumers' knowledge or authorization. Turiansky is the only remaining defendant named in the FTC's lawsuit against Ira Smolev, et al. The Commission has alleged that Turiansky played an important role in Smolev's upselling scheme and assisted in the development of the deceptive scripts used by third-party marketers. As part of the settlement, Turiansky must post a $100,000 bond before engaging in any telemarketing, a $500,000 bond before engaging in any negative option sales, and must pay $10,000 for consumer redress. In addition, the proposed settlement would require Turiansky to obtain express, verifiable authorization for telemarketing and Internet sales and would prohibit him from sharing certain financial information about consumers with third parties unless he first obtains consumers' express consent to do so. A number of states, including Florida, Illinois, and Missouri have reached similar settlements with Turiansky.
In October 2001, the FTC and numerous state attorneys general filed complaints in federal and state courts against a group of buying clubs including Triad Discount Buying Service,Inc. of Boca Raton, Florida, its related companies, and their operator, Ira Smolev. The FTC complaint and some of the state complaints also named two officers, including Turiansky. The FTC charged the Triad companies with deceptively signing up buying club members through more than 100 telemarketers, deceptively obtaining consumers' credit card numbers through telemarketers without the consumers' knowledge or authorization, and placing unauthorized charges on those credit cards. According to the FTC, the scripts used by the telemarketers did not disclose or adequately disclose that the consumers' credit card numbers would be turned over to a third party, Triad, or that Triad would charge consumers if they did not cancel their trial membership within the 30-day period. The FTC alleged that the scripts also failed to disclose or to disclose adequately that in following years, consumers' credit cards would be charged annual renewal fees, unless consumers cancelled.
The settlement announced today resolves all charges against Bruce Turiansky. The proposed stipulated order, which requires the court's approval, would require Turiansky to post a $100,000 bond prior to participating in any telemarketing, and a $500,000 bond prior to engaging in any negative option sales. The proposed settlement would prohibit Turiansky from engaging in the deceptive practices alleged in the original complaint. The order would require Turiansky to provide adequate disclosure of material terms, obtain express, verifiable authorization for telemarketing and Internet sales, and would require him to comply with the Telemarketing Sales Rule in effect now and as it may be amended. In addition, Turiansky would be barred from providing certain financial information, such as credit card information, to any third party unless he first obtains consumers' express authorization to do so.
Further, the settlement would require Turiansky to pay $10,000 to pay for consumer redress. It contains an avalanche clause making Turiansky liable for the full $2.4 million he received from Triad should the court find that he made any misrepresentations on his financial statements. Finally, the settlement contains various recordkeeping and reporting requirements to assist the FTC in monitoring Turiansky's compliance.
The Commission vote to authorize staff to file the stipulated final judgment against Bruce Turiansky was 5-0. It was filed in the U.S. District Court, Southern District of Florida, in Fort Lauderdale, on December 10, 2002.
NOTE: This stipulated final judgment is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Stipulated final judgments have the force of law when signed by the judge.
Copies of the stipulated final judgment 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 www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundred of civil and criminal law enforcement agencies in the U.S. and abroad.
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