FTC Negotiates Settlement with Mailing House over Allegedly Fraudulent Promotions

Marketing Response Group, Inc., a Tampa, Florida-based mailing house, and related defendants named in a January 1996 Federal Trade Commission case for allegedly assisting fraudulent telemarketers have agreed to settle the FTC charges under a broad order that would bar them from sending out misleading promotional materials on behalf of telemarketers in the future. The order also would require the defendants to monitor future telemarketing clients’ business activities for deception. The FTC had alleged that the defendants acted on behalf of numerous telemarketers, sending out mail promotions that falsely promised quick land sales, guaranteed awards and free vacations. The defendants all signed the settlement order without admitting that they violated the law.

The defendants are: Peter J. Porcelli, Jr., and William S. Kilichowski and the five companies they operate: Marketing Response Group, Inc.; Marketing Response Group and Laser Company, Inc.; Service Bureau International, Inc.; Pete-Nik Holdings, Inc.; and Palm Harbor Holdings, Inc.

If approved by the court, the order specifically would bar them from designing, printing, mailing or otherwise distributing or helping a client distribute promotional materials which misrepresent that:

• a consumer will receive a premium, gift or prize;
• a consumer has no obligation to purchase something in order to receive a promoted premium, prize or gift;
• a consumer will receive a travel-related product or service without any obligation to purchase something; or
• a telemarketer client is authorized to conduct real estate transactions, is interested in purchasing property such as that owned by consumers, or will sell the consumer’s property.

The order also would bar all of the defendants from violating or assisting others in violating the FTC’s Telemarketing Sales Rule, which requires telemarketers to give consumers -- before they pay -- key information about the cost of the offered products or services, any material restrictions or limitations on their use, and any refund or cancellation policy or the fact that the marketer does not offer one. Telemarketers offering prize promotions also must state the odds of receiving any prize, the fact that no purchase is necessary to enter, instructions on a cost-free method of entering, and all material conditions of receiving the prize. The rule also prohibits telemarketers from making a variety of misrepresentations about their goods or services.

Finally, the order contains various record keeping and reporting provisions designed to assist the FTC in monitoring their compliance.

The Commission vote to approve the settlement, a proposed consent judgment, for filing in court was 5-0. It was filed this morning in U.S. District Court for the Middle District of Florida, Tampa Division.

NOTE: A consent judgment is for settlement purposes only and does not constitute an admission by the defendants of law violations. Consent judgments have the force of law when signed by the judge.

Copies of the proposed consent judgment and other documents associated with this case, as well as the FTC’s Telemarketing Sales Rule and related consumer education brochures, are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. All FTC brochures and news releases also are posted on the FTC’s web site at http://www.ftc.gov (no final period). For the latest FTC news as it is announced, call the FTC NewsPhone at 202-326-2710.

(FTC File No. X960036)