Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Marketer of 9/11 Commemoratives to Settle FTC Charges, (Jan 17, 2013)
Organizations Mentioned:Federal Trade Commission | U S Mint, Inc.
By Jody Coultas, J.D.
A company that sold September 11th commemorative coins and collectibles agreed to pay $750,000 to settle Federal Trade Commission charges that it deceived consumers by charging for items that were never ordered and failed to properly mark its imitation items with “COPY,” according to the FTC website.
The FTC alleged that National Collector’s Mint Inc. (NCM) advertised that the coins were exclusively authorized, but the 9/11 commemoratives were imitations and not marked “COPY,” as required by the Hobby Protection Act. Congress had authorized the U.S. Mint to manufacture and sell a tenth anniversary 9/11 commemorative medal, but because of consumer confusion with NCM’s products, the U.S. Mint issued a consumer alert warning that its medal is “the only official United States coin or medal to commemorate the 10th anniversary of the September 11th attacks.”
NCM’s television ads directed consumers to an automated telephone ordering system to order products. The ordering system offered additional products that callers could not bypass, and often registered sales orders even when callers indicated that they did not want additional items. The FTC alleged that NCM failed to provide the total cost of the purchase, a breakdown of the items ordered, refund policy terms, and that the ordering system resulted in many callers receiving products they did not order.
Consumers were told they could return items within 30 days for a full refund, but NCM allegedly failed to disclose that consumers would have to pay for insurance and shipping. NCM also failed to inform consumers that purchases exceeding $100 required a return authorization number from a live telephone operator. It was allegedly difficult to reach a live person, and those who did often got the runaround.
The proposed settlement agreement permanently prohibited NCM from misrepresenting any product or service, and required them to clearly disclose the total costs and fees, any refund policy, and any material limitation or condition that applies to any “Satisfaction Guarantee” or similar representation prior to purchase. The settlement also bars NCM from violating the Telemarketing Sales Rule, the Unordered Merchandise Statute, and the Hobby Protection Act. The proposed order is subject to approval by the federal district court in New York City.
News: ConsumerProtection FederalTradeCommissionNews