STATE OF FLORIDA OFFICE OF THE ATTORNEY GENERAL ASSURANCE OF VO LUNT ARY COMPLIANCE

Transcription

1 " ' ' IN THE MATTER OF: STATE OF FLORIDA OFFICE OF THE ATTORNEY GENERAL IN THE NEWS, INC., THOMAS A. BILLINGE and BARRY J. MURANTE, JR., AG Investig. #L ASSURANCE OF VO LUNT ARY COMPLIANCE This Assurance of Voluntary Compliance ("AVC") is herewith entered into between the STATE OF FLORIDA, OFFICE OF THE ATTORNEY GENERAL, DEPARTMENT OF LEGAL AFFAIRS (the "OAG") and IN THE NEWS, INC., THOMAS A. BILLINGE, and BARRY J. MURANTE, JR. (hereinafter referred to as "ITN", "BILLINGE," "MURANTE" or "Respondent(s)") in lieu of the OAG bringing an action against the Respondents for the Matters Investigated, as more specifically described below, under the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"), Ch. 501, Part II, Florida Statutes (2010) and other state and federal laws and regulations. This A VC is entered into pursuant to the authority vested in the OAG under (6), Fla. Stat., and is not evidence of a violation of FDUTPA. The Respondents enter into this A VC as a compromise and settlement of the Matters Investigated and to avoid the expense of litigation. I. PARTIES 1. The OAG has express jurisdiction and authority to investigate and prosecute violations of the FDUTPA and other State and federal unfair and deceptive practice laws and regulations. Page 1 of21

2 . ' 2. Respondent In The News, Inc., is a registered Florida for profit corporation that transacts business in the State of Florida and has its principal place of business located at 8517 Sunstate Street, Tampa, Florida ITN' s business activities include the advertising, telemarketing, solicitation, production, sale and delivery of various types of plaques to consumers residing in and outside the State of Florida. 3. Respondent Thomas A. Billinge is the President, Director and Registered Agent of In The News, Inc. and resides at 555 5th Avenue NE, Suite 543, Saint Petersburg, Florida Respondent Barry J. Murante, Jr., is the Vice President and Director of In The News, Inc. and resides at 3706 North Ridge Avenue, Tampa, Florida II. MATTERS INVESTIGATED 5. Based on consumer complaints, the OAG instituted an investigation pursuant to the FDUTPA into Respondents' business practices involving ITN's telemarketing and shipment of plaques without any, or sufficient, consumer authorization and with a monetary obligation of consumers for return of the plaques to ITN, during the period May 2008 to present (hereinafter referred to as the "Matters Investigated"). 6. In conjunction with the Matters Investigated, ITN produced a multitude of documents and electronic data to the OAG. The OAG also conducted certain interviews with consumers and other persons knowledgeable ofitn's business practices. 7. ITN's prior business practices included generally offering and selling plaques through nationwide telemarketing to individuals and businesses that are prominently recognized in various newspapers, magazines and other publications for Page 2 of21

3 their achievements. ITN currently employs approximately 60 employees in its Tampa, Florida office, 27 of which regularly make telemarketing sales calls to consumers. 8. In accordance with its general business practices, ITN telemarketing representatives offer consumers the right to inspect the plaque for 10 days after receipt before becoming obligated for any payment to ITN. While contacting and speaking with consumers, ITN telemarketers enter concurrent notes into ITN's computer system concerning some aspects of what transpired during the calls. ITN telemarketers may use ITN's sale script as a guide in making sales calls to consumers, but they are not required to follow the script verbatim. Use of the ITN call script and the information contained therein requires disclosure of the cost of the plaque and the shipping fee, that the customer will have 10 days to inspect the plaque, that the customer is responsible for payment to send the plaque back to ITN if he or she is not I 00% satisfied and that a written "Letter of Guarantee" will be faxed to the customer within one to two business days. 9. After contacting a consumer on the telephone, the ITN representative sends the consumer by facsimile or mail the Letter of Guarantee further explaining that, if not 100% satisfied, the consumer must contact ITN within 10 days of receipt and an ITN representative will provide instructions for return of the plaque at a minimal cost to the consumer. I 0. The plaque is typically mailed to the consumer one to two weeks following the ITN sales call along with an "Invoice" reflecting the total cost of the plaque, shipping, Page 3 of21

4 and taxes. The Invoice additionally states, "Terms: Due Upon Receipt Late Charges After45 Days $10." 11. Consumers who elect to return the plaque are variously offered to either ship the entire plaque or cut a portion of the plaque and send it back to ITN at their expense. Consumers are also provided a written "Return Merchandise Authorization" that confirms authorization from ITN to return the plaque and the return process to do so. 12. ITN sends out invoice statements to consumers every 30 days from the time a plaque is shipped. Delinquent accounts are referred to a collections company, Transworld Systems, after 90 days. Transworld Systems in turn contacts referred consumers through written communications seeking to collect charges for ITN plaques. However, ITN asserts that it does not request and Transworld Systems does not refer, any delinquent account to a credit bureau. 13. The OAG further reviewed consumer complaints stating that ITN plaques were sent to them without being contacted by ITN and without the consumer's authorization. Some consumers also complained that they were contacted by ITN even though the consumer was listed on a state or federal "Do Not Call" listing. 14. ITN asserts that it has voluntarily and of its own accord modified some of its prior business practices effective October 1, III. DEFINITIONS 15. "Delivery" or "Deliver(ed)" means the obligor for a plaque or other goods has received and taken possession of the plaque or other goods shipped by ITN. Page 4 of21

5 16. "Emphasize" means that the required information or disclosure is prominent and stands out from the rest of the text, including larger bold type and color of ink. Emphasized information being disclosed to consumers shall be placed at the beginning and in close proximity to any offer or sales material. 17. "Employee(s)" means a principal, officer, director, agent, employee, representative, contractor, and assign ofitn, or any person acting on ITN's behalf. 18. "Express Informed Consent" means a writing or audio recording containing the consumer's informed and express consent to delivery of a plaque or other goods under all the clearly and conspicuously disclosed material terms and conditions of ITN' s off er to purchase. 19. "ITN" means In The News, Inc., including any of its principals, officers, directors, agents, employees, representatives, successors, affiliates, subsidiaries, contractors, assigns and any person acting on its behalf. 20. "Material" means likely to affect a consumer's choice of, or conduct regarding goods or services. 21. "Negative Option Feature,, or "Negative Option" means, in an offer or agreement to sell or provide any goods or services, a provision under which the consumer's silence or failure to take affirmative action to reject goods or services or to cancel the agreement is interpreted by a seller as acceptance of the offer. 22. "Record(s)," "Recorded" or "Recording" means any written document, electronic data or telephonic communication that is created in the course of ITN' s business practices. Page 5 of21

6 23. "Telemarketing" means a method, plan, program or campaign which is conducted to induce the purchase of goods or services by use of one or more telephones and includes telephone calls made from the State of Florida to consumers located inside or outside the State of Florida. IV. UNDERTAKINGS 24. The Respondents, including any of ITN's principals, officers, directors, agents, employees, representatives, successors, affiliates, subsidiaries, contractors, assigns and any person acting on its behalf, HEREBY AGREE to comply with all provisions of the FDUTPA and all other state and federal laws and regulations, as now constituted or as may hereafter be amended, related to ITN's Telemarketing activities. The Respondents FURTHER AGREE as follows: A. SOLICITED SALES 25. Respondents shall distribute and utilize all current "Do Not Call," "No Sales Solicitation Calls," or similar listings of any state or federal agency prior to placing any Telemarketing calls to a consumer and ensure full compliance with all laws and regulations prohibiting sales solicitation calls to persons identified on Do Not Call listings, including Section (3), Fla. Stat., and 16 C.F.R (b). 26. Respondents shall further create, distribute and utilize up-to-date listings of all consumers who have communicated to ITN that they do not want any future calls fromitn. Page 6 of21

7 27. ITN shall clearly and conspicuously disclose all Material terms and conditions of any ITN sales offer pursuant to all state and federal laws and regulations, including FDUTPA, Section , Fla. Stat., and 16 C.F.R At the time of an initial offer to purchase and prior to Delivery of a plaque or other goods, ITN shall, more particularly, require disclosure of the following terms and conditions in a clear and conspicuous manner: a. a full description, including the size, dimensions, and material, of the plaques or any other goods, b. the total cost to purchase a plaques or any other goods, c. any restrictions, limitations or conditions to purchase, receive or use the plaques or other goods, d. any refund, cancellation, exchange or purchase policy, and e. any Negative Option Feature used with the offer of plaques or other goods, including but not limited to, the fact that the consumer will be charged unless the consumer takes affirmative action to avoid the charge(s), the date(s) the charge(s) will be submitted for payment, the specific steps the consumer must take to avoid the charge(s) and, if a consumer does not want to purchase a Delivered ITN plaque, he/she may refuse the offer at cost to them. 29. ITN shall authorize and clearly and conspicuously disclose that consumers may inspect a plaque or other goods for at least 10 days from the time of Delivery without obligation for any payment whatsoever and that consumers must cancel ITN's Page 7 of21

8 offer to purchase the Delivered plaque or other goods during the 10-day inspection period to avoid being charged for a plaque or other goods. 30. ITN shall further clearly and conspicuously disclose to consumers that, if ITN' s offer to purchase a plaque or other goods is cancelled, the consumer may return the plaque or other goods without any cost or obligation whatsoever to the consumer. 31. ITN shall neither bill nor charge consumers for a plaque or other goods, including any shipping and handling costs, until and unless the consumer fails to either cancel or attempt to cancel ITN's offer to purchase, or the consumer expressly consents to ITN's offer to purchase the plaque or other goods, within the 10-day inspection period. A consumer's refusal to accept Delivery of a plaque or other goods from ITN shall constitute a cancellation and require confirmation of such cancellation from ITN in accordance with paragraph If a consumer elects to cancel or otherwise decline ITN's offer to purchase a plaque or other goods before or during the 10-day inspection period, ITN shall not charge the consumer any amount for the plaque or other goods, including any shipping and handling costs, to return the plaque or other goods, or any part thereof, to ITN. If ITN deems a plaque or other goods delivered to a consumer to be a gift or does not permit a return of the delivered plaque or other goods at no cost to a consumer who timely cancelled or declined ITN's offer to purchase during the 10-day inspection period, the consumer shall be entitled to treat the delivered plaque or other goods as a gift and to receive all rights and title to the plaque or others goods. Page 8 of21

9 33. ITN shall provide to the consumer in writing a mailing address, toll-free telephone number, facsimile number and an address that can be used by the consumer to cancel an off er to purchase a plaque or other goods shipped by ITN. The consumer shall be provided a confirmation of cancellation or confirmation of a gift from ITN on the same business day, but in no case more than the next business day from the time the consumer communicates with ITN or from the time a returned plaque is received by ITN. ITN's failure to respond to a consumer as required herein shall be deemed a cancellation of the offer to purchase by the consumer, and any delivered plaque or other goods to the consumer shall constitute a gift. 34. Prior to shipping a plaque or any other goods, ITN shall obtain Express Informed Consent from the consumer for shipment of the plaque or other goods, and identify and Record: a. the name, address and telephone number of the purchaser and ultimate obligor for a plaque or other goods, b. if applicable, the name, address and telephone number of the authorizing person who has requested the plaque or other goods be directly shipped to him/her rather than the obligor, and the authorizing person's explanation therefore, and c. who, by name, address and telephone number, consented to the shipment. Page 9 of21

10 CONFIRMATION LETTER 35. Upon conclusion of any Telemarketing call where a consumer clearly and voluntarily consents to an ITN offer to be sent a plaque or other goods for inspection purposes, ITN shall immediately send a confirmation letter, and/or facsimile to the obligor or authorizing person. 36. The confirmation letter, and/or facsimile shall contain all the Material terms and conditions of ITN's offer for the plaque or other goods in a clear and conspicuous manner and shall Emphasize the applicable terms and conditions listed in paragraph 28 and the method to cancel the offer listed in paragraph 33. DELIVERY 37. At the time of Delivery of a plaque or other goods, ITN shall provide the consumer the confirmation letter detailing any and all costs related to the offer of purchase of the plaque or other goods. The confirmation letter, as well as the invoice, shall also detail and Emphasize the applicable terms and conditions listed in paragraph 28 and the method to cancel the offer listed in paragraph The time permitted for inspection until the consumer becomes liable for any payment shall not begin until the obligor has received and taken possession of the plaque or other goods shipped by ITN, the confirmation letter, and the invoice. CALL SCRIPTS 39. Respondents shall prepare, distribute and utilize Telemarketing call scripts that contain and require disclosure by ITN of all Material terms and conditions in a clear and conspicuous manner, including the disclosures specified in this A VC. Page 10 of21

11 40. Any call scripts utilized by ITN shall Emphasize the applicable terms and conditions listed in paragraph All ITN Telemarketing conversations with consumers over the telephone shall be fully and completely Recorded. 42. The call scripts shall be used and followed for all ITN Telemarketing calls related to the offer and sale of plaques, or of any other goods or services. TRAINING 43. The Respondents, through its officers and managers, shall immediately institute training incorporating all of the provisions and requirements contained in this A VC for all its current Employees and new Employees. 44. All required training under this AVC shall be completed within 60 days from the date of this A VC being executed for current Employees or within 60 days from the hire date for new Employees. 45. Within 60 days from the date of this AVC being executed, ITN shall establish a training manual for all ITN Employees. After establishment, the manual shall be amended periodically as necessary. The manual shall be used, and each Employee provided a copy of the manual, in all initial Employee training and upon amendment. The manual and any amendment( s) thereto shall contain the date released. 46. The manual shall include an execution page, signed by ITN's compliance officer and Respondents Bilinge and Murante, stating that the manual has been reviewed and all the requirements contained in this AVC are clearly and conspicuously detailed in the training manual. Page 11 of21

12 l COLLECTIONS 47. To the extent that consumers cancelled or attempted to cancel ITN's offer to purchase a plaque during the period May 2008 to September 30, 2010 (the "operative period') and their unpaid account charges were referred by ITN to Transworld Systems, ITN shall instruct Transworld (or any other collections entity or person) to cease any further collection efforts on behalf of ITN relating to any referred charges on said consumers' accounts. ITN shall obtain written confirmation within 10 days from execution of this AVC by all parties thereto that Transworld has ceased all further collection efforts and immediately provide the original, signed letter to the OAG. 48. ITN or Transworld shall also give to those referred customers, who cancelled or attempted to cancel a plaque during the operative period, written notice that ITN and Transworld have ceased any further collection efforts. 49. After the date of execution of this AVC, ITN shall not conduct any collection efforts against those consumers who cancel or attempt to cancel an ITN offer to purchase a plaque of other goods related to a free inspection period or any other type of Negative Option offer. ITN shall further ensure in the future that no collection efforts are instituted against those consumers who cancel or attempt to cancel an ITN offer to purchase a plaque of other goods. B. UNORDERED MERCHANDISE 50. Respondents shall not hereafter conduct any offer to purchase a plaque or other goods to consumers related to a free inspection period or any other type of Negative Option offer and ship such plaque or other goods unless and until: Page 12 of21

13 a. ITN has clearly and conspicuously disclosed the terms and conditions and has complied with the other provisions described in paragraphs 25-49, above, related to an offer to purchase a plaque or other goods, and b. ITN has in fact communicated with the consumer obligor and obtained the consumer's Express Informed Consent to receive the plaque or other goods on a free trial or inspection, that the consumer will be charged unless the consumer takes affirmative action to avoid the charge(s), the date(s) the charge(s) will be submitted for payment, the specific steps the customer must take to avoid the charge(s) and, if a consumer does not want to purchase a Delivered ITN plaque, he/she may refuse the offer and retain the plaque without any monetary or other obligation whatsoever. 51. Respondents shall comply with all provisions of the FDUTP A and all other state and federal laws and regulations, including , Fla. Stat. and 39 U.S.C.A. 3009, as now constituted or as may hereafter be amended, related to the mailing of unsolicited or unordered plaques or other goods. 52. If Respondents Deliver any unsolicited or unordered plaque or other goods to a consumer, the consumer may refuse delivery of the plaque or other goods. If any unsolicited or unordered plaque or other goods are Delivered to a consumer, the consumer has no obligation to return the merchandise, and such merchandise shall be deemed a gift to the consumer. V. INVESTIGATIVE COSTS 53. The Respondents AGREE AND CONSENT to pay the OAG the sum of forty thousand dollars ($40,000.00) in investigative costs and attorney fees related to the Page 13 of21

14 Matters Investigated. Said amount shall be paid concurrently with Respondents' execution of this AVC, payable to the Department of Legal Affairs Revolving Trust Fund for expended attorneys' fees, legal costs and other expenses associated with the Matters Investigated resolved herein and for future compliance costs in conjunction with this AVC. 54. The investigative costs and fees shall be delivered to Keith P. Vanden Dooren, Special Counsel, Office of the Attorney General, Economic Crime Division, The Capitol, PL-01, Tallahassee, Florida VI. ENFORCEMENT 55. Pursuant to (6), Fla. Stat., a violation of any of the terms of this A VC shall constitute a prima facie violation of the FDUTPA. Upon a violation of any of the terms of his A VC, the OAG shall be entitled to file a civil action under the FDUTP A in any court of competent jurisdiction and seek an injunction or other appropriate relief from such court to enforce the provisions of this AVC. 56. In any proceeding related to a violation of this A VC, the issue to be decided shall be limited to the alleged violations of the A VC and any alleged violations not released herein. In such proceeding, the Respondents agree to waive any and all defenses and counterclaims they may have had to the matters released herein, except as to claims or defenses related to the alleged violation(s) of this A VC or as to the need for injunctive relief. 57. This AVC constitutes a complete settlement and release of all claims and defenses that the parties may have against each other with respect to all civil claims, Page 14 of21

15 . ' causes of action, damages, restitution, fines, costs, attorneys' fees and penalties arising from the Matters Investigated. VII. GENERAL PROVISIONS 58. The provisions set forth in this AVC are continuing. However, ITN may at any time request in writing to the OAG a modification of this A VC based on a material change in ITN's business practices or in the law, and the OAG agrees to timely review the request in good faith and respond in writing to the request within a reasonable time. ITN is permitted to make such a written request to the OAG no more than once every calendar year. 59. All Recorded information related to Respondents' Telemarketing activities shall be maintained by ITN for not less than five (5) years from the date of creation and subject to inspection by the OAG upon reasonable notice. 60. This AVC shall not be construed to affect the rights of any private party to pursue any remedies available to them under the FDUTPA or under any other laws or regulations. 61. This AVC shall be binding upon ITN, including any of its principals, officers, directors, agents, employees, representatives, successors, affiliates, subsidiaries, contractors, assigns and any person acting on its behalf. If ITN merges with any other business entity or sells, assigns, or otherwise transfers substantially all of its assets to any other business entity, ITN shall provide reasonable prior notice of this AVC to the surviving corporation or the purchaser, assignee, or transferee and its binding effect upon Page 15of21

16 the surviving corporation, purchaser, assignee, or transferee and shall further provide immediate notice to the OAG. 62. Nothing in this AVC after its execution by the parties shall be construed to constitute approval by the OAG of any of ITN's sales, marketing, advertising or other business practices, whether or not related to the p~ovisions contained in this A VC, or to prohibit any enforcement action by the OAG against ITN for violations of the FDUTPA. 63. The person(s) who signs this AVC in a representative capacity for ITN acknowledges and warrants that he or she is duly authorized to execute the A VC on behalf of ITN. 64. The Respondents and any of their representatives further acknowledge that they have read and understand the A VC, that they accept the legal consequences involved in signing the AVC, and that the AVC constitutes the entire agreement between the parties herein. 65. Any notices, documents or other material required by, or related to, this AVC shall be sent to the following representatives of the parties: Respondents ITN, Thomas A. Billinge and Barry J. Murante, Jr.: Latour "LT" Lafferty, Esq. Fowler White Boggs P.A. 501 East Kennedy, Suite 1700 Tampa, Florida Tel. (813) Fax (813) tlaffertyCa1fowlerwhite.com Page 16 of21

17 Office of the Attorney General: Keith P. Vanden Dooren Special Counsel Office of the Attorney General Economic Crime Division The Capitol, PL-01 Tallahassee, Florida Tel. (850) Fax (850) This A VC may be executed in one or more counterparts, each of which shall be deemed to be an original, and as taken together shall constitute the fully executed AVC. INTENTIONALLY LEFT BLANK Page 17 of21

18 ... " FOR IN THE NEWS, INC.: I, 77_t_7~~.r~A~ _B--',-~{/._,,..,_,1 <:._, state that am fully authorized to enter into this Agreement of Voluntary Compliance on behalf of In The News, Inc., and hereby sign and execute this Agreement of Voluntary Compliance on _,1_1('f_,_t.1..~r/~'/-~. ~--' IN TilE NEWS, INC. (Signature) By: Z---~H~q-'""'~1-d_ ~'-~~it~~-~~'-<~~-- (Print name) ' State of EZ.oa 1'pA ) ) County of,&w.:r!i!"i? ) BEFORE ME, as Notary Public, appeared 77-/o h'1 A 5 n. 73; I /;-,vtf!c, who swore under oath that he is an officer, director, trustee or other authorized representative of IN TilE NEWS, INC. and signed this Assurance of Voluntary Compliance, and who is either (Check One) ~rsonally known to me OR produced the following ~\\\\\lllllu1111i1. identificatio~~~ w.~~~!ll~'si ~w:~\t-.\ssion~~ "'(C' ~. ;::: "c >Y' "' 28,.~ --,:;: :~ #'""'',.,0 ~. 't = :~'J ~YP\ = =*: *= -..._~~~~~~ - ~<;C, llod :l ~ -.,:, ~. 1;. ~- ~;IE ~~: ~~~ ",SI~. ~ r.-::ne.""<.~ --~-~~~ Notary Public Page 18 of21

19 ... '. THOMAS A. BILLINGE, Personally: I, THOMAS A. BILLINGE, hereby sign and execute this Assurance of Voluntary Compliance --~7, -~,,.l~,l, THOMAS A. BILLINGE State of R OV\...( µ ) County of Jh tr f i hov~ BEFORE ME, as Notary Public, appeared Thomas A. Billinge, who signed and executed this Assurance of Voluntary Compliance and who is either (Check One) personally known to me OR,/ produced the following identification: Page 19 of21

20 .. BARRY J. MURANTE, JR., Personally: I, BARRY J. MURANTE, JR., hereby sign and execute this Assurance of Voluntary Compliance._7_-..;_..<._-2., BARRY J. MURANTE, JR. State of f:.f L"f; A..N ) County ofd/y 1 f SbDl"~) BEFORE ME, as Notary Public, appeared Barry J. Murante, Jr., who signed and executed this Assurance of Voluntary Compliance and who is either (Check One) personally known to me OR / produced the following identification: f1m~ ~{L,, d»;vd f.-l~-..l<;,; NOTARY PUBUC.STATE OF FLORIDA... uila M. Narine (Wlco~ion #DD _~ Elpires: FEB. 22, 2012 llondb mau An.Mme.BONDING CO.,INC. Page 20 of21

21 ACCEPTANCE BY ATTORNEY GENERAL The Attorney General, through his undersigned designees, does accept and approve this Assurance of Voluntary Compliance executed by the Respondents In The News, Inc., Thomas A. Billinge, and Barry J. Murante, Jr. Dated: o /t l /t I ff/p/11 Dated: OFFICE OF THE ATTORNEY GENERAL Economic Crime Division The Capitol, PL-01 Tallahassee, Florida Tel. (850) Fax (850) Page 21 of21