The Federal Trade Commission has begun an inquiry into The Reader's Digest Association's telemarketing practices, according to a document filed with the Securities and Exchange Commission by Reader's Digest late Monday.
Reader's Digest received a letter from the FTC inquiring whether the company complies with the national no-call registry as well as rules governing negative-option transactions and unordered merchandise, according to the document.
The FTC last year enacted more restrictive rules for negative-option marketing, in which consumers are offered a free trial and billed unless they opt out by a specified date, in response to consumer complaints that they were receiving charges for items and services they did not agree to buy.
“The FTC letter states that the inquiry follows consumer complaints,” Reader's Digest stated in the document. “The letter makes no specific assertion of any wrongdoing by us.”
Reader's Digest said its legal counsel reviews its marketing practices in advance and that it would cooperate with the FTC. According to the document, the inquiry is in its preliminary stages.
The FTC and Federal Communications Commission, which jointly enforce the no-call list, both have started investigations based on consumer complaints of telemarketing calls that violate the list. Neither agency has issued fines yet, though the FCC has issued eight citations, most recently to Mortgage Concepts Inc., New Smyrna Beach, FL.