American Mint LLC will issue refunds and pay more than $25,000 in fines, alleged to have billed and attempted to collect payments from consumers for coins and other commemorative items that failed to arrive, were never ordered or were returned and not credited, Pennsylvania Attorney General Tom Corbett said yesterday.
The settlement also requires American Mint, Mechanicsburg, PA, to alter the way it conducts its mail-order business and to issue refunds to consumers who come forward and file a complaint before Nov. 7. The legal action follows an investigation into more than 100 complaints from consumers throughout Pennsylvania and 36 other states.
According to investigators, American Mint promoted the sale of several coins and other commemorative items between 1999 and 2005 on television, the Internet and through direct mail. Many consumers who made initial purchases complained that they began to receive subsequent shipments of similar but more expensive items that they never ordered. In some cases, the purchases appeared as unauthorized charges on their credit cards.
Those who received bills for the unwanted items and refused to pay were notified that their past due account would be forwarded to a collection agency. Still others said the company tried to collect on accounts even though the items had been returned. Additionally, some consumers failed to receive the items and were billed for the purchases, it was alleged.
American Mint was accused of failing to adequately inform consumers at the time of purchase that they were enrolling in a membership program and agreeing to receive subsequent shipments of similar merchandise. To be removed from the mailing lists, some consumers said, American Mint told them they must contact the Direct Marketing Association on their own.
American Mint is accused of violating the FTC Rule Concerning Prenotification Option Plans by failing to clearly and conspicuously disclose the material terms of the plan including that it is a membership program. Under other state and federal laws, consumers are not required to return unsolicited or unordered merchandise that is mailed to their home or business.
Under the agreement, American Mint admitted to no wrongdoing. It also agreed to let consumers cancel their orders and receive refunds or request delivery of the prepaid merchandise that they have not received within the time stated in the solicitation or within 30 days of the order.
For future marketing efforts, American Mint said it will clearly and conspicuously notify consumers that they are joining a membership plan.
Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters