FTC Charged Firm With Deceptive Magazine Sales Practices

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WASHINGTON (AdAge.com) -- In the largest-ever judgement against a telemarketer, the Federal Trade Commission has won a $39 million contempt-of-court ruling
> Read latest FTC settlement statement.

> Read 1996 FTC settlement statement.

against Diversified Marketing Service and related Oklahoma City companies and individuals.

The decision was announced today, but was actually ordered by a U.S. District Court judge last week.

The magazine telemarketer's case stems from some of the sales practices the companies agreed to cease in 1996.

According to the FTC, the practices included claiming that four-year subscriptions weren't cancelable and making threats about credit ratings.

$39 million in revenue
Though Diversified, a medium-sized clearing house for magazine subscriptions, agreed to halt its tactics, the FTC charged earlier this year that the practices continued. The FTC said the $39 million it won reflects the actual payments consumers made to the company.

An attorney for Diversified and related companies did not return calls for comment.

Besides Diversified Marketing Service, those ordered to pay the award include H.G. Kuykendall Jr.; H.G. Kuykendall Sr.; C.H. Kuykendall; National Marketing Service; NPC Corporation of the Midwest; and Magazine Club Billing Service.

MPA statement
The Magazine Publishers of America today issued a statement saying that it supported the enforcement of consumer laws.

"The magazine industry has worked very hard to insure that their brands are truthfully represented and correctly marketed by the hundreds of legitimate independent subscription agents in the country," the statement read. "We support the enforcement of current laws designed to protect consumers and our brands."

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