A federal judge has sided with the Federal Trade Commission, ruling that a group of Jackson County businesses were deceptive when they sold marked-up newspaper subscriptions with mailers resembling those direct from the publisher.
Referencing a mailer that solicited Washington Post subscriptions with the phrase “Notice of Renewal,” U.S. Magistrate Judge Mark Clarke called the mailers “deceptive on their face,” because they were likely to mislead a reasonable consumer, according to documents filed last week in U.S. District Court in Medford.
“Nothing on the mailer indicates that it is an advertisement,” Clarke ruled.
The printed Readers Payment Service mailer, which directed $599 payments to a White City post office box, included statements in boldface such as, “You’re receiving one of the lowest available rates we can offer for your regular subscription.”
Accused ringleaders Jeffrey Hoyal and Dennis Simpson have argued the caveats on the forms were technically true, but Clarke determined that the disclaimers were “confusing and inadequate to cure the deception.”
Other statements on the mailer were “confusing at best, and wholly false at worst,” Clarke ruled. For example, the mailer said that subscription orders were “automatic” after receiving payment. Publications such as the Wall Street Journal and New York Times refused orders that came from the unauthorized businesses in White City, and sent the businesses repeated cease-and-desist letters.
“Undisputed evidence submitted by the FTC demonstrates that the defendants would attempt to fill a subscription after receiving full payment from the consumer,” Clarke ruled. “Thus, rather than being ‘automatic,’ subscriptions were actually not even guaranteed to be filled.”
The FTC separately had asked the court to rule in favor of a $20.5 million judgment against the individuals involved, but Clarke said that should be determined at a trial, currently scheduled for Oct. 29 in Medford.