2000 News |1999 News |1998 News |1997 News |1996 News

advertising law
advertising law

  October 1997 Advertising Law News...

advertising law  From: Advertising Compliance Service.
advertising law

advertising lawNOTE: Here is where you can find advertising law information based on news briefs that appeared in past issues of the Reference Service, Advertising Compliance Service during the month of October 1997.


Over 1,500 private sector volunteers joined a coalition of federal, state and local law enforcers to target alleged direct mail con artists who prey on senior citizens. FTC, U. S. Postal Inspection Service, the National Association of Attorneys General (NAAG), 25 state Attorneys General and local law enforcement officials and AARP announced 190 law enforcement actions against fraudulent direct mail schemes, including one firm that allegedly used over 200 different business names and bilked consumers out of $100 million a year.

"Even though we live in the hi-tech age, the old fashioned 'snail mail' is still a favorite medium for con artists." So said Jodie Bernstein, Director of FTC's Bureau of Consumer Protection. "Today [October 1, 1997] we're announcing a four pronged, federal/state, public/private initiative to target the scammers who use the mails to con consumers. First, efforts by federal, state and local agencies have resulted in 190 law enforcement actions. Second, the FTC, Postal Inspection Service, state Attorneys General, NAAG and AARP have formed a strike force to collect and review direct mail for future law enforcement action. Third, AARP has announced a `Project Senior Sting' mail collection and ongoing state-wide `Project Senior Sting' efforts in Massachusetts and Arizona--where unsolicited mail is being turned over to law enforcement agencies to search for possible examples of fraud. Finally, in conjunction with the U.S. Postal Inspection Service, and the Yellow Pages Publishers Association, we're launching a consumer education campaign to help consumers and small businesses spot mail fraud," she said.

"AARP believes that the law enforcement actions announced today are an important step in the war against consumer fraud." So said AARP President Margaret A. Dixon. "But it is equally important to educate consumers about these types of crimes to help them avoid becoming victims in the first place."

The alleged scams targeted in the law enforcement sweep conned consumers with a range of deceptive claims, including misrepresentations that a mailing was from the government; deceptive claims that consumers have won something; misrepresentations that consumers have unclaimed assets; phony billing scams; bogus advance fee credit card offers; and false contest claims.

"Those who target our mailboxes with fraudulent offers are cunning and clever. They play the numbers game," according to Winconsin Attorney General James E. Doyle, President of the National Association of Attorneys General. "If they send out enough offers and only a small number of consumers respond from each state, they can still make a bundle."

In one FTC case, a U.S. District Court issued a temporary restraining order, ordered an asset freeze and appointed a receiver to oversee the business assets of one firm. FTC charged that the company sent mailings that appeared to be bills for computer service contracts to organizations that had not ordered these services, including churches and non-profit organizations. Many mailings indicate that they are "renewals" or "upgrades of service" to previous contracts, or warn that an account is "past due."

The defendants in that case also deceptively claim to have "1200 convenience centers located Coast to Coast" and list a local or regional return address, according to FTC. Their solicitations provide an 800 number for consumers to call for "unlimited maintenance and repair service" including assistance by telephone, according to that federal agency. Many organizations mistakenly paid the defendants hundreds of dollars after receiving the deceptive mailings. Other organizations purposely paid them to receive the promised services.

According to FTC, the defendants rarely if ever, provided any of the services promised. In fact, the complaint states that return addresses on the defendants mailings are actually leased mail drops, not service facilities; the defendants' 800 number that organizations call in attempt to recover their funds or seek services, lands the organization in what one called a "phone mail jail"; and rather than "1200 convenience centers," defendants operate out of one location. FTC is seeking to bar future violations by the firm and its principals and obtain redress for consumers who lost money. The U. S. Postal Inspection Service assisted FTC on this case.

NOTE: The Commission files a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

(FTC Release, October 1, 1997.)

INTERNET MATERIALS: Materials relating to these FTC matters are available on the Internet at FTC's World Wide Web site at: http://www.ftc.gov.)

© Copyright 1997-2009 JLCom Publishing Co., L.L.C. All rights reserved. This publication, in whole or in part, may not be reproduced, stored in a computerized, or other, retrieval system, or transmitted in any form or by any means whatsoever without the prior written permission of JLCom Publishing Co., L.L.C.

IMPORTANT NOTICE: Materials included in this Web Site are intended for general information purposes only and are not intended to provide - and do not constitute - legal or other advice. Persons who need legal or other services should contact a duly licensed professional. Inclusion of links on this Website are to Websites that are maintained by third parties over whom JLCom Publishing Co., LLC has no control. Such links do not imply endorsement of the material that is contained therein. JLCom Publishing Co., LLC makes no claims, representations, or warranties as to the accuracy, completeness, or appropriateness of these Web sites or the information these websites contain. Read this disclaimer and our privacy statement before using this site.