FTC prevails over accused newspaper and mag subscription scamsters

One of THOSE Cases

You know you’re in for a treat when the list of defendants takes up half of the complaint.

Federal Trade Commission v. Adept Management, Inc., et al., a 2016 Federal Trade Commission Act case filed in the U.S. District Court, District of Oregon, might as well be called FTC v. The Whole Mispucha.

About 13 pages of the 25-page complaint are dedicated to merely listing the defendants; in the words of the FTC, they are “a complicated and ever-changing web of companies.” You can imagine that with a defendant list consisting of the baroque tangle of companies, dbas and individuals featured in this case, the alleged underlying scam must be interesting.

All the News That’s Fit to Mint

The complaint alleges that since at least 2010, the defendants, “through a complicated and ever-changing web of companies,” engaged in a nationwide campaign that relies on misrepresentations to solicit newspaper renewals and new subscriptions from consumers. The defendants were accused of cooking up mass mailings that looked like subscription notices and representing that they were authorized by, or acting on behalf of, newspaper publishers to obtain and renew subscriptions. According to the complaint, in numerous instances, these representations were false or misleading because many publishers of the newspapers had not authorized the defendants to solicit subscriptions or renewals or to accept payments from consumers for subscriptions or renewals. The defendants were not affiliated with the newspapers in any way “and had no preexisting authorization to solicit, sell, accept, or receive payment for, or secure newspaper subscriptions or subscription renewals” – but they were happily charging a 40% markup for many of the subscriptions. Disclosures about their (lack of) relationship to the publishers were included only in fine print on the back of the notices – and even then, applied only to the magazine subscriptions. The complaint alleges that defendants’ practices have prompted thousands of consumer complaints and that some consumers paid twice for the same subscription.

In addition to the inflated rates, the subscribers often failed to receive their publications, and when they called customer service for refunds, they often received no assistance whatsoever. Multiple publishers – the overall list included The New York Times, The Wall Street Journal, The Seattle Times and The Denver Post – sent the various defendant companies cease and desist letters.

The Takeaway

This decades-long scam wound to an end with a trial in the District of Oregon in 2019. The court ordered the defendants banned from direct mail marketing, future sales misrepresentations and any benefit from the consumer information they gathered during the alleged scam. Finally, the horde of defendants was hit with $8.9 million in judgments.