Discount-Club Marketer Settles FTC Case

A company that upsold the Triad discount club, which was accused of illegal billing practices in 2001, will pay $535,000 to settle its involvement in the case, the Federal Trade Commission said yesterday.

Telemarketers working for Special Data Processing Corp., Clearwater, FL, pitched the Triad Discount Buying Service in 1998 and 1999, the FTC said. The telemarketers failed to inform consumers that their credit cards would be charged after a 30-day trial period if they failed to cancel and that charges would be renewed automatically every year, according to the FTC.

The upsells were made on outbound calls placed by Special Data Processing and on calls transferred to it by third parties, the FTC said. The FTC also charged Special Data Processing with failing to identify itself clearly and disclose that the purpose of the outbound calls was to sell magazines.

Special Data Processing based its telemarketing scripts on scripts it received from Triad, the FTC said. In 2001, Triad paid $9 million to settle an FTC complaint regarding its free-trial programs.

Triad's settlement money went toward reimbursing as many as 275,000 consumers. The money paid by Special Data Processing will also be used for consumer reimbursement.

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