Discount Club Marketer Agrees to Change Practices

Share this article:
A discount-club membership marketer agreed to change its business practices to settle a Federal Trade Commission complaint alleging violations of disclosure and negative-option offer rules, the FTC said last week.


Nine corporate defendants operating collectively as Promenade Communications LLC, Los Angeles, charged consumers $96 to $249 for discount club memberships, according to the FTC. Promenade has used outbound telemarketing and upsells on inbound sales calls since 1999 to market the clubs under the names "Promenade Discount Buying and Travel Club," "HealthSound" and "TravelDeals."


Third-party telemarketers working for Promenade frequently failed to identify themselves, the FTC said, and represented themselves as calling on behalf of the consumer's credit card company. They offered a free trial without disclosing that charges would begin at the end of the period and be renewed yearly unless the consumer canceled.


Promenade failed to obtain consumers' billing information directly and failed to disclose they already had gotten it from a third party, the FTC said. Promenade billed consumer accounts on a recurring basis without written authorization, a violation of the Electronic Funds Transfer Act, the FTC said.


In the settlement, Promenade agreed to adhere to marketing rules governing telemarketing, negative-option offers and electronic funds transfers. The company also agreed to pay the FTC $2.4 million, which will be suspended if it pays $113,000 within five days of the judgment.


Share this article:

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in News

Target Names Retail Veteran Brian Cornell as CEO

Target Names Retail Veteran Brian Cornell as CEO

He leaves the top job at PepsiCo Foods to take the spot vacated by Greg Steinhafel in the aftermath of the data breach.

NBA Names Insurance Exec as its CMO

NBA Names Insurance Exec as its CMO

Nationwide and State Farm veteran Pamela El takes the league's marketing helm next month.

Bloomberg Names Bigley CMO

Bloomberg Names Bigley CMO

Communications chief Deirdre Bigley is appointed head of global marketing for the business and financial news company.