Pennsylvania attorney general Mike Fisher announced yesterday a $3 million multi-state bankruptcy claim settlement with Direct American Marketers Inc., Irvine, CA, a direct-mail sweepstakes company. Direct American was accused of conducting contests that deceived millions of consumers nationwide.
Fisher said Pennsylvania and 29 other states reached a settlement with Direct American and Anthony C. Brown, its president and CEO. The consent agreement resolves a lawsuit filed by Fisher’s office against the defendants for allegedly violating the Unfair Trade Practices and Consumer Protection Law.
According to the attorneys general, the defendants sent millions of sweepstakes and prize promotion solicitations to consumers nationwide. The company used more than 400 alias business and personal names in its solicitations for dozens of sweepstakes. This activity began in 1994 and ended when the company filed Chapter 11 bankruptcy in August 1997.
In many of the solicitations, large cash awards were offered and consumers were encouraged to call the defendants’ 900 number to claim their prize or find out if they had won a prize. The states alleged that consumers were falsely urged to respond quickly before the contest ended, otherwise they would forfeit any prize.
DAMI filed for bankruptcy following several individual state actions and a settlement with the Federal Trade Commission over alleged violations of FTC regulations. The money from that settlement is reserved for consumer restitution in several states.
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