FOR IMMEDIATE RELEASE

Contact: Todd Hallidy
Phone: (302) 577-8314
Date: October 24, 2001
 

SETTLEMENT ANNOUNCED IN CONSUMER DECEPTION CASE

Delaware Residents to Receive Restitution From 'Buying Club' Business
 

(Wilmington, DE) - Attorney General M. Jane Brady today announced that 828 consumers in Delaware will be eligible for restitution under a settlement reached today with Triad Discount Buying Service, Inc. of Boca Raton, Florida. The $9 million settlement between Triad, the Federal Trade Commission, and the Attorneys General in more than 40 states resolves charges that Triad misled consumers into accepting trial memberships in so-called 'buying clubs' and obtained consumers' billing information from telemarketers without the knowledge or authorization of the consumers. Nationally, $8.3 million from the settlement will be dedicated to consumer restitution, and $750,000 will cover investigative costs. The specific share to be awarded in Delaware is still being calculated. Court approval of the settlement is pending.

The Consumer Protection Unit in the Delaware Department of Justice became aware of the issue last year when consumers began complaining about being wrongly billed for memberships in various 'buying clubs.' Investigators observed that, despite the differing names of the clubs, they shared a common toll-free number. All were operated by Triad.

Attorney General Brady noted, "Consumers are the big winners in this settlement. It provides for restitution, and it includes safe-guards that will prevent deceptive activity in the future. The combined efforts of the state Attorneys General and the FTC have put these buying club operators on notice."

According to the Federal Trade Commission, consumers were deceptively signed up for the buying clubs through more than 100 telemarketers and catalog sale operators. Once consumers provided a credit card number for the telemarketer's product, they were offered a 30 day, no obligation, free trial in a buying club. Names and credit card numbers of consumers who agreed, and even some that did not, were forwarded to the Triad companies. Triad subsequently charged membership fees to the credit cards without the knowledge or authorization of the consumers. In its complaint, the FTC alleged that consumers were not properly told their credit card numbers were being given to a third party, or that they'd be charged a membership fee if they did not cancel their trial membership within 30 days. Nationwide, about 275,000 consumers who filed complaints against Triad will be eligible for partial restitution. The 828 eligible in Delaware filed their complaints either with the Consumer Protection Unit, the FTC, or directly with Triad.

Deputy Attorney General Olha N.M. Rybakoff, Director of the Consumer Protection Unit, encourages any consumer who believes they are eligible for a refund, and who has not already filed a complaint, to contact the Consumer Protection Unit at 1-800-220-5424 or 1-302-577-8600.

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