A Clearwater, FL company will pay the Federal Trade Commission $535,000 for consumer redress to resolve charges that it misled consumers about the Triad Discount Buying Service it sold.
According to the Commission, during 1998 and 1999, Special Data Processing pitched the Triad service to consumers, typically through upselling to its own customers or to customers transferred to them by third-party sellers and by using telemarketing scripts based on ones they received from Triad.
The FTC charged that SDP failed to adequately disclose that consumers had to cancel the service within 30 days to avoid having their credit cards charged an annual fee. It also allegedly failed to mention that their cards would be charged a renewal fee each subsequent year unless they canceled the memberships. As a result, SDP’s customers were charged for fees that they had not authorized.
The order also barred SDP from violating the Telemarketing Sales Rule and from falsely representing the amount, timing, or manner of any fee a consumer would be billed without his authorization. The order further mandated that a consumer actually bought a product or service or authorized a transaction. Other provisions require SDP–in connection with telemarketing–to make certain disclosures related to billing, shipment, and other material conditions of any offer.
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