States Sue over Phony Magazine SubscriptionsApr 3, 2015
Five states are suing companies over fraudulent and overpriced subscriptions for magazines and newspapers, Democrat & Chronic reports. A release from New York State Attorney General Eric Schneiderman's office stated that the lawsuit was filed "to stop unlawful and deceptive business practices and seek restitution for consumers,"
The suit alleges that Orbital Publishing Group, Inc and a ring of interrelated New York and Oregon companies solicited consumers without obtaining permission from the publishers. Additionally, the promotions claimed that "consumers were receiving 'one of the lowest available rates,' when, in fact, they were being charged, in some cases, more than double the publication price. The companies then pocketed the difference," the release indicates. The release cites one example where consumers were being charged as much as $59.95 for an annual subscription of Consumer Reports when the actual cost is $29.95.
According to the lawsuit, the companies have been engaged in this type of illegal fraudulent solicitation since 2010. The notices are designed to look as if they came directly from at least 44 publications, including Consumer Reports, National Geographic, the New York Times, the Wall Street Journal and the Washington Post.
Schneider also alleges that the companies did not inform consumers of an expiration date, leading some to "send money to the companies to renew their subscriptions, not realizing that their current subscription had not yet expired. Other consumers complained that they sent payments to the companies but never received their subscriptions. Many of the consumers affected by the scam appear to be elderly."
The release states that thousands of complaints were received by the Federal Trade Commission and the Better Business Bureau and the offices of the attorneys general in the states filing the suit. A number of the publishers have also sued and issued cease and desist letters.
According to Democrat & Chronicle, the solicitation companies have used many different names, including Magazine Payment Services, Associated Publishers Network, Publishers Periodical Service, United Publishers Service, Publishers Billing Exchange, Publishers Billing Association, Publishers Billing Center, Magazine Billing Network, Publishers Distribution Services, Magazine Distribution Service and Subscription Billing Service.