May 13, 2020
by Rosario Méndez
Attorney, DIvision of Consumer and Business Education, FTC
Some dishonest companies lie when they say that a product is “no risk.” That’s what the FTC says Progressive Business Publications, a business publication company, did. They had telemarketers call businesses, schools, nonprofits, and other organizations to offer samples of their newsletters and books at “no risk.” But they didn’t make clear that, by accepting the samples, your organization got enrolled in an expensive annual subscription.
The tactics the defendants used were tricky. The FTC says, for example, that the telemarketers routinely asked employees their date of birth. Then, they used that information as “confirmation” that the person had agreed to the annual subscription. They also made it difficult for organizations to cancel the unwanted subscription and kept billing them every month. Then, if someone failed to pay, the defendants sent the unpaid debts to another company for collection. The FTC also sued that debt collection company, alleging that they were aware that many of the organizations had not agreed to the subscription and, therefore, they were collecting debts they knew – or should have known – weren’t valid.
The FTC says that these defendants lied, concealed information, intimidated, and threatened business owners and employees. If you own a business or work at a non-profit organization, be on the alert for bad actors like these. They often target smaller organizations, believing that their threats will intimidate you into paying them. The best defense is an informed workforce.
Talk to your employees and co-workers about cases like this one and other schemes that target businesses.
Know your rights when dealing with debt collectors.
If your business receives unordered products, remember that the law says you can keep them as a gift.
Tell the FTC if your business is the target of a scheme or deceptive practice at ftc.gov/complaint.
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May 13, 2020