Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Tristar, Product Trends settle New York AG’s deceptive marketing claims, (Jul 20, 2016)
Organizations Mentioned:Product Trend, LLC | Tristar Products, Inc.
By Michael Menzhuber, J.D., LL.M.
Direct marketers Tristar Products, Inc. (Tristar) and Product Trend, LLC (Product Trend) have agreed to settle charges that they engaged in deceptive practices which resulted in hidden charges to customers, New York Attorney General Eric T. Schneiderman announced today.
Tristar (whose products include: Genie Bra; blenders and juicers; the Ab Coaster; and the Cardio Twister) and Product Trend (whose products include: Total Pillow; Wonderhanger; and Furniture Fix) sell their products directly to consumers, typically through television and online advertising. The attorney general’s investigation found that:
Both marketers ran misleading infomercials on television that often featured attractively priced "By One, Get One" offers, which required consumers to purchase a double order of the advertised product. However, the ads did not adequately disclose that consumers would be charged two separate process and handling fees or the amount of those fees, which significantly increased the cost of the offer.
When consumers placed orders they were subjected to a confusing, automated ordering process that typically included numerous "upsell" offers.
Consumers were also not given the opportunity to review and edit their orders before they were processed, resulting in consumers being charged more than they expected and receiving products that they did not order.
The attorney general’s investigation also revealed that consumers who sought warranty service from Tristar or to obtain authorization to return products often faced long telephone hold times and had difficulty in obtaining relief or assistance.
The settlements require Tristar to pay $700,000 and Product Trend to pay $175,000 for restitution, penalties, costs, and fees. The marketers are also required to:
Clearly and conspicuously disclose all material terms of an advertised offer.
Clearly and conspicuously disclose the amount of any processing and handling fee for the second item in a "Buy One, Get One" offer.
Provide consumers with an opportunity to confirm the details and total price of any order before the order is processed.
Disclose the amount of any processing and handling fees during the ordering process before the consumer is asked to confirm the order details.
Label all hyperlinks to clearly convey the consequence of clicking the link.
Email an order summery with any processing, handling, or other charges to consumers who place phone orders.
Ensure that marketers’ customer service lines are adequately staffed so that consumers are not subjected to long hold times.
The settlements with Tristar and Product Trend are part of a wider investigation into deceptive advertising and sales practices allegedly used by the direct marketing industry. In March 2015, the Attorney General and the FTC reached a similar settlement with Allstar Marketing Group, LLC.
Companies: Product Trend, LLC; Tristar Products, Inc.
News: Advertising StateUnfairTradePractices NewYorkNews