Court Halts Rebate Mail Marketer

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A federal judge in Seattle yesterday ordered several companies accused of using bogus rebate checks to market Internet services to cease their marketing efforts, the Federal Trade Commission said.

Judge Robert Lasnik of U.S. District Court for the Western District of Washington sided with the FTC in its lawsuit against Olympic Telecommunications, French Dream Investments and Coto Settlement. According to the FTC, the companies sent $3.50 rebate checks to consumers without properly informing them that if they cashed the checks, monthly charges of $19.95 to $29.95 would be placed on their telephone bills.

The mailings included a form that appeared to be an invoice, designed to give the impression that a previous business relationship with the consumer existed, the FTC said. Consumers did not realize that by cashing the checks they were agreeing to the purchase of Internet services.

The FTC did not disclose how many consumers were affected by the rebate mailings. The judge has continued the case for a ruling at an unspecified date on how much compensation the accused companies should pay.


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