FTC: Magazines rank ninth among fraud complaints – Udates
Magazines and buyers’ clubs have the dubious distinction of ranking ninth among the top 10 consumer fraud complaints. The Federal Trade Commission, which released a “Top 10” fraud complaint list for the first time in January, reported that magazines and buyers’ clubs accounted for 3 percent of the 204,000 consumer complaints entered into the agency’s Consumer Sentinel database last year, which includes complaints collected by more than 50 law enforcement and private-sector agencies.
“Magazine subscriptions, in particular, have been a perennial problem,” said J. Howard Beales III, director of the FTC’s Bureau of Consumer Protection, in releasing the list. Beales specifically cited consumer complaints about being billed for subscriptions or memberships when they thought that they were receiving free trials that would require further action to incur an obligation. (In February, the FTC charged an Oklahoma-based magazine telemarketing outfit that uses several names, including Diversified Marketing Services, Inc. and NPC Corp., and H.G. Kuykendall, Jr., H.G. Kuykendall, Sr. and C.H. Kuykendall with violating the terms of a 1996 settlement barring illegal billing practices. The ETC is asking a U.S. District Court to bar the firm from doing business and order $51 million in consumer redress.)
Some state attorneys general have been investigating similar complaints, and several have settled with publishers and club marketers (February page 8).
Identity theft topped the ETC’s list, accounting for 42 percent of the complaints. Other areas included in the list were Internet auctions (10 percent); Internet services and computer complaints (7 percent); shop-at-home and catalog offers (6 percent); advance-fee loans and credit protection (5 percent); prizes/sweepstakes/gifts (4 percent); business opportunities and work-at-home plans (4 percent); foreign money offers (4 percent); and telephone pay-per-call/information services (2 percent).
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