A bankrupt firm has agreed to settle Federal Trade Commission charges that it deceptively sold buying club memberships to consumers, then billed their credit cards without permission.
Preferred Alliance Inc., of Atlanta, is barred through its Chapter 7 bankruptcy trustee from continuing in business. The trustee is also prohibited from selling the firm’s customer list.
The company, which did business as VacantSun Travel Discounts and GenesisCard, operated through third-party telemarketers, according to the FTC.
When consumers called to order vitamins, diet aids and other products, the telemarketers tried to upsell them into joining a buying club, the FTC contended.
However, they misrepresented that their trial offers were “free,” and did not indicate that they were really negative option plans, the FTC added.
The defendants received the consumers’ billing information from the telemarketers, and used it to illegally bill them. In addition, the firm failed to provide refunds or to do so in a timely manner, the FTC added.
Also named as defendant in the case filed last February is principal Bruno Faillace.
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