HCI Direct, a direct marketer of hosiery and other products, has reached a $455,000 agreement with Pennsylvania and 14 other states over charges it violated state consumer protection laws.
State Attorney General Tom Corbett said that HCI sent direct mail solicitations to consumers and offered a free sample of merchandise, such as hosiery. After consumers responded to the solicitation, they automatically became enrolled in a continuity sales plan.
Investigators learned that under this plan, consumers who were automatically enrolled allegedly received periodic shipments of merchandise, which they were charged for. Unless a consumer affirmatively opted out of the plan, they were continually charged and payment for one shipment automatically triggered another shipment, according to Corbett.
Corbett said that HCI allegedly failed to clearly disclose to consumers the negative option nature of the HCI
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