DRTV Giant Telebrands Agrees to $550,000 Legal Settlement With New Jersey

Operators Can No Longer Just Stand By; Terms Must Be Fully Disclosed

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Telebrands, which says it's the largest marketer of "As Seen on TV" products, must pay a $550,000 settlement and make a lengthy list of changes to its ordering and payment systems under an agreement announced today by the New Jersey attorney general's office.

One requirement: Operators can no longer just be standing by. They'll have to answer the phone if a consumer opts to speak to a live rep rather than keep using the "interactive voice response" system.

The Fairfield, N.J.-based company sells the Pocket Hose, Bullseye Pee Pads for potty training pups and Ankle Genie swelling-reducing support sleeves among dozens of other products sold on late-night cable TV. Under the terms of the agreement it won't be allowed to repeat offers for additional merchandise once consumers have declined them on its websites or during automated phone orders. And its ordering systems must clearly disclose all costs and allow consumers to edit orders before finalizing them.

But wait, there's more. Customer reps must take training programs on the new requirements, and Telebrands must appoint and pay for a customer affairs liaison approved by the attorney general's office to monitor compliance with the agreement and field customer complaints about products or payments for up to two years.

The settlement stems from a suit filed last year by New Jersey in state court accusing Telebrands of violating fraud and advertising regulations by "aggressively upselling products," subjecting consumers to a lengthy ordering process, failing to provide a means to decline offers for additional products, failing to disclose the full cost of orders and selling consumers things they'd already declined to purchase. The suit also charged Telebrands with failing to live up to a 2001 consent order.

The suit followed "undercover purchases" by investigators from the New Jersey Division of Consumer Affairs of Instabulbs, the Olde Brooklyn Lantern and the Pocket Hose, according to a release.

"We've put consumers back in control of the ordering payment process," said Acting Attorney General John J. Hoffman. "No longer will consumers find themselves subjected to an onslaught of solicitations for products that they have no interest in, with no way to end the merciless upselling."

In its statement, Telebrands said the settlement "will lead to an improved shopping experience," but said there was no admission of liability, and that the monetary settlement covered the state's investigative costs, consumer programs and other statutory costs.

"When these issues were brought to our attention, we immediately welcomed the recommendations and partnership with the Division of Consumer Affairs to resolve these matters," Telebrands CEO A.J. Khubani said. "We are a company predicated on consumer satisfaction and if we can improve the experience of our customers, we want to do that expeditiously."