Cross Media Marketing Corp. issued a statement yesterday saying that its magazine division is under investigation by the Federal Trade Commission. In the same statement, Cross Media denied the charges — that its magazine division had violated telemarketing regulations.
It is unclear why Cross Media made the announcement, and FTC officials were not immediately available for comment. The company said the FTC had charged the company on Tuesday with violating the Telephone Sales Rule and the Federal Trade Commission Act. The nature of the charges were not specified.
According to Cross Media, the FTC also said Cross Media had broken an agreement made in 1996 by Direct Sales International, which the company bought in January 2000. Without admitting wrongdoing, Direct Sales made the agreement to settle charges that it misrepresented costs and conditions of magazine subscriptions and charged consumer bank accounts without authorization.
Cross Media said it verifies and records all magazine subscription agreements made by phone and is reviewing those records. The company said it has found that in some of the consumer complaints cited by the FTC, consumers had never been Cross Media customers, while in other cases consumers had asked for and received refunds.
When it bought Direct Sales, Cross Media changed the company's name to Media Outsourcing Inc.