FTC Returns $2.9 Million to Consumer Victims in DVD Vending Scam

The Federal Trade Commission is mailing 454 refund checks totaling more than $2.9 million to consumers who were victimized by a scam that promoted video rental machines as a business opportunity.

The FTC alleged in its case against American Entertainment Distributors, Inc., that the defendants – five companies and five individuals – deceived consumers into paying $28,000 to $37,500 apiece for video rental vending machines by telling them they could expect to earn between $60,000 and $80,000 a year, or recoup their initial investment in six to 14 months.  In fact, according to the FTC, the defendants had no reasonable basis for their claims and all investors lost money.

The checks will be mailed by an administrator working for the FTC.  The amount of the refunds will vary depending on the amount lost by each consumer; 450 of the checks will be for more than $2,000.  Consumers who have questions, or who have not yet filed a complaint with the FTC and wish to do so, should call the Redress Administrator, Gilardi & Co. LLC, toll free, at 1-866-271-9147, or visit the FTC’s refunds website.  The FTC never requires consumers to pay money or provide information before redress checks can be cashed. 

Checks will be mailed on June 28, 2012, and must be cashed on or before August 27, 2012.

The FTC has resolved its claims against nine of the ten defendants in its case against American Entertainment, Inc.  Litigation continues against the tenth defendant.

Consumers should carefully evaluate claims about business opportunities.  For more information see:  Money Matters:  Business Opportunities.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.