How-to Publisher Settles Allegations of Deceptive Book Club Marketing
According to the FTC's complaint, between July 1, 1997, and June 20, 1999, CPI's advertising and telemarketing calls failed to disclose the terms and conditions of its pre-notification negative-option plans and misrepresented the free trial offers that were designed to entice consumers to join the plans.
For example, CPI offered consumers a book for a 14-day "free trial" and the opportunity to receive future offers for additional books. CPI did not tell consumers that if they bought a book, they would be automatically enrolled in a club, according to the complaint. As members of the club, consumers received offers for additional books and automatically received the books if they failed to return rejection forms that CPI included in the offers. CPI also failed to tell consumers in the initial advertising that they had to return those forms. Many consumers failed to return the forms and received subsequent books they did not order.
As part of the proposed consent decree, CPI has agreed to pay $200,000 in civil penalties. CPI has agreed to disclose all material terms and conditions of its sales plans to all current and future members and to stop collection efforts for books shipped to consumers during the period it failed to make the disclosures.