The State alleged in its August 2014 Complaint, filed in State Superior Court in Essex County, that Telebrands violated the New Jersey Consumer Fraud Act and Advertising Regulations by, among other things, aggressively upselling products through its IVR phone system and websites; subjecting consumers to a lengthy ordering process; failing to provide a means for consumers to decline offers for additional products; failing to provide consumers with an opportunity to confirm the merchandise order prior to authorizing charges; shipping and billing for additional products that consumers declined to purchase; failing to provide consumers with the total cost of their orders; and failing to provide consumers with an opportunity to speak with a live customer service representative when ordering through the IVR system. The State’s allegations, in part, were established through the undercover purchases made by Division investigators of Telebrands’ products (e.g. “Instabulbs,” the “Olde Brooklyn Lantern” and the “Pocket Hose). The Complaint also alleged that Telebrands, by its conduct, violated the terms of a 2001 Final Consent Judgment and Order that resolved prior litigation with the State.
Under the terms of the settlement, Telebrands, at its expense, is required to retain a Consumer Affairs Liaison for up to a two-year period, with the person subject to the approval of the Division of Consumer Affairs. The Consumer Affairs Liaison, among other things, will monitor Telebrands’ compliance with the settlement terms and applicable laws, facilitate resolution of consumer complaints and provide quarterly reports to the Division.
“We’ve put consumers back in control of the ordering and payment process, through these revisions to Telebrands’ business practices. No longer will consumers find themselves subjected to an onslaught of solicitations for products that they have no interest in, with no way to end the merciless upselling,” Acting Attorney General John J. Hoffman said.
Under the terms of the Final Consent Judgment and Settlement Agreement, Telebrands will revise its IVR system and product-devoted websites, to:
- inform consumers of the cost of their merchandise order, including any shipping and handling charges, prior to consumers authorizing payment;
- provide consumers with an option to speak with a live customer service representative when a merchandise order is placed (e.g., press “0” to speak with live Customer Service Representative);
- not repeat an offer to purchase additional merchandise, once a consumer has declined to purchase such additional merchandise;
- provide a means for consumers to decline solicitations for additional merchandise through the IVR system (e.g., press “1” to accept the offer and press “2” to decline the offer);
- only charge and/or ship to consumers the merchandise for which consumers authorized payment;
- clearly and conspicuously disclose to consumers the point at which they are completing a merchandise order and authorizing payment for that order;
- provide consumers with a means to edit their primary order on the Telebrands’ product-devoted websites before confirming their purchase and authorizing payment for that order;
- provide consumers with a means to edit any order, in addition to the primary order, on the Telebrands’ product-devoted websites prior to the consumer’s confirmation of his/her purchase and authorization of payment for that order;
- not process any merchandise order (e.g., primary order, additional order) prior to the consumer’s confirmation of his/her purchase and authorization of payment for that order;
- clearly and conspicuously display a link or other means through which consumers may opt-out from additional merchandise solicitations through the Telebrands’ product-devoted websites;
- clearly and conspicuously display a link or other means through which consumers may decline such additional merchandise solicitations, in the event a consumer chooses to view additional merchandise solicitations on the Telebrands’ product-devoted websites;
- ensure that on the Telebrands’ product-devoted websites, consumers must affirmatively select any items to be added to their merchandise order before Telebrands actually adds such items to their order;
- ensure all prices and costs associated with a consumer’s merchandise order shall be reflected on a page (e.g., confirmation page) of the Telebrands’ product-devoted websites prior to the consumer’s confirmation of the merchandise order;
- clearly and conspicuously disclose its purchasing, return, refund and cancellation policies; and
- clearly and conspicuously disclose the differences between versions of merchandise, including any “deluxe,” “basic” and/or “standard” versions.
“As a result of this settlement, we expect consumers will be protected through Telebrands’ strict adherence to our consumer protection laws and regulations,” said Steve Lee, Acting Director of the State Division of Consumer Affairs. “The employment of a Consumer Affairs Liaison is a rare, but necessary safeguard to protect consumers, in light of our past history with Telebrands.”
Pursuant to the settlement, Telebrands is also required to develop and implement training materials for its customer service representatives which shall include, at a minimum, the required and prohibited business practices outlined within the Final Consent Judgment and Settlement Agreement. Telebrands shall provide such training within 30 days and shall have a continuing obligation to provide such training to new customer service representatives.
Investigator Elizabeth Perry in the Division of Consumer Affairs Office of Consumer Protection conducted the investigation of this matter.
Deputy Attorney General Natalie Serock in the Consumer Fraud Prosecution Section in the Division of Law represented the State in this action.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or (973) 504-6200.
To view Final Consent Judgment & Settlement Agreement click here.
