Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC brings charges in newspaper, magazine subscription notice scheme, (May 3, 2016)

By Edward L. Puzzo, J.D.

The operators of a web of companies engaged in a scheme to deceive consumers by sending unauthorized newspaper and magazine mass mailings resembling subscription renewal notices and charging as much as 40 percent more than normal renewal rates, according to a complaint filed by the FTC in the federal district court in Medford, Oregon (FTC v. Adept Management, Inc., Civil Action No. 1:16-cv-00720).

The defendants received multiple "cease and desist" letters, directing them to stop taking unauthorized subscription orders for more than 375 newspapers, including The New York Times, The Wall Street Journal, The Seattle Times, and The Denver Post. According to the complaint, the defendants sent consumers "Notice of Renewal/New Order" mailers for subscriptions to newspapers and magazines, claiming that consumers’ subscriptions would automatically renew if they pay the "lowest available rates" that were authorized by the publisher. In fact, the FTC alleges, the defendants did not have the publishers’ authorization and charged up to 40 percent more than the newspapers typically charge.

The newspapers have asked the defendants to stop, and many have placed "alerts" on their websites and/or in their publications to warn consumers. The complaint alleges that to circumvent law enforcement actions and publishers’ letters telling them to "cease and desist," the defendants created shell corporations to process and submit orders paying the publishers’ normal subscription rate and pocketed the additional amount the defendants received from consumers.

Many consumers have complained about the notices, paying an inflated price, delays in receiving publications they ordered, or receiving the wrong publications. In some instances, consumers have paid twice for the same subscription, the FTC said. Consumers who learned the defendants did not represent their regular newspaper and tried to cancel payment or obtain refunds have found it hard to reach customer service. Those who have reached the defendants often received no refund or only a partial refund, or succeeded only after complaining to the Better Business Bureau or to state or federal law enforcement agencies.

The FTC complaint seeks injunctive relief, the refund of monies paid, and other equitable relief.

News: ConsumerProtection FederalTradeCommissionNews