To settle investigations by the New York Attorney General's office, a pair of companies agreed to pay almost $1 million and change their advertising practices.
Tristar and Product Trend "lured" consumers with deceptive infomercials for products including the Genie Bra, Ab Coaster, Total Pillow, and Furniture Fix, according to AG Eric T. Schneiderman. Some of the ads featured "Buy One, Get One" offers that required the consumer to pay two separate processing and handling fees. The "confusing" order process included multiple upsell offers for additional products without providing consumers an opportunity to review and edit an order before it was placed.
The Assurance of Discontinuance with Tristar used a Genie Bra infomercial as a representative example of the activities investigated by the AG. As actresses wiggle in their ill-fitting bras, a voiceover asks questions such as "Are you constantly struggling with your straps? Do your underwires dig into your skin? … Isn't it time you stopped your daily struggle with uncomfortable bras that prevent you from looking your best?"
Touting the benefits of the Genie Bra as "the most comfortable, conform-fitting bra you have ever worn", the infomercial included testimonials from actors who encouraged consumers to order the product online or by phone for just $19.99, plus shipping and handling. Those who did so within 20 minutes would get a second bra free.
Neither the audio nor video of the infomercial disclosed the amount of processing and handling fees, the AG said, which "in some cases were as much as half the amount charged for the product." The company also failed to mention that consumers would be charged a separate processing and handling fee for each bra.
Schneiderman faulted the ordering process which included "a number" of deceptive and misleading features such as neglecting to provide consumers with an opportunity to confirm or edit their order at the end of the process to ensure its accuracy, and upsell offers that did not "clearly and promptly" provide consumers with the option to decline the offer.
For example, one consumer responded to the Total Pillow "Buy One, Get One" offer touted as $19.99 plus shipping and handling—and was charged $91.73 as a result of unclear upsells and shipping and handling charges, the AG alleged.
In addition to the payments ($700,000 for Tristar and $175,000 for Product Trend), the companies are required to clearly and conspicuously disclose all material terms of an advertised offer as well as the amount of any processing and handling fee for the second item in a "Buy One, Get One" offer. They must also disclose the amount of any processing and handling fees during the ordering process. Consumers must be provided with the opportunity to confirm the details and total price of an order before it is processed, and those that place orders by phone must receive an order summary via email with a breakdown of processing, handling, or other charges.
All hyperlinks must be labeled to clearly convey the consequence of clicking on them and consumers must receive a checkout page with the ability to make changes or edit their order before it is final. Adequate staffing—to avoid long hold times—was also required by the New York AG.
To read the Assurance of Discontinuance in In the Matter of Investigation … of Tristar Products, click here.
Why it matters: In a press release about the settlements, AG Schneiderman noted that the actions against Tristar and Product Trend were "part of a wider investigation into deceptive advertising and sales practices allegedly used by the direct marketing industry" based on consumer complaints. The settlements "bring much needed reforms to two major players in the direct marketing industry and insure that consumers will have a clear understanding of the charges before they place an order."