Fake subscription notices are the subject of a new lawsuit filed by the Federal Trade Commission in an Oregon federal court.
The defendants, a web of dozens of companies, sent consumers "Notice of Renewal/New Order" mailers for subscriptions to real magazines and newspapers, such as The Denver Post, The New York Times, and The Wall Street Journal. But the notices themselves were often not authorized by the publishers, the agency alleged. A statement appeared in fine print on the back of the notices that the defendants "do not necessarily have a direct relationship with the publishers or publications," although the disclaimer only referenced magazines and not newspapers.
Consumers were also promised that their subscriptions would be automatically renewed at "one of the lowest available rates," but the defendants regularly marked up their prices, in some cases up to 40 percent, the agency added.
Even when the defendants did have authorization to renew a subscription, consumers faced a myriad of problems, the FTC said.
"Many consumers experienced delivery problems or delays or they did not receive the requested newspapers at all," the complaint alleged. "Some consumers paid twice for the same subscription and some complained about what appeared to be substantially inflated renewal rates. Many consumers attempted to cancel payments to Defendants, but were unsuccessful or they received only a partial refund. Some consumers received refunds only after much effort."
"Thousands" of consumers and more than 375 newspapers have complained about the defendants, with some publications sending cease and desist letters to the defendants to halt their practices.
The complaint seeks to stop the defendants' operation and obtain consumer redress.
To read the complaint in FTC v. Adept Management, click here.
Why it matters: The agency alleged that the defendants violated Section 5 of the Federal Trade Commission Act by misrepresenting that the renewal notice mailings were authorized by the publications and that consumers would receive their subscription at a price offered by the publishers. Neither claim was true, the FTC said.