A lawsuit brought jointly by the attorneys general of five states alleges that consumers nationwide received unauthorized and misleading magazine and newspaper subscription notices.
New York was one of five states that sued “to stop unlawful and deceptive business practices and seek restitution for consumers,” according to a news release from New York Attorney General Eric Schneiderman, the (Rochester) Democrat & Chronicle reports. The suit was filed against Orbital Publishing Group, Inc. and a group of interrelated New York and Oregon companies. The suit alleges the companies sent solicitations without the permission of the publishers. The notices said, “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 news release says.
The lawsuit alleges that since 2010 the companies sent solicitation notices designed to look like they came directly from at least 44 different publications, including Consumer Reports, National Geographic, the New York Times, the Wall Street Journal and the Washington Post. Schneiderman alleges that the solicitations did not provide expiration information and this prompted many consumers to renew their subscriptions, not realizing that the subscription had not yet expired. In some cases, consumers complained that they sent payments but never received subscriptions. According to Schneiderman, many of the affected consumers appear to be elderly.
“It is illegal under New York law to trade on the name of reputable publications and use deceptive advertising to trick consumers into overpaying for goods and services,” Schneiderman’s news release said. The companies charged Wall Street Journal subscribers $599.95 for a one-year subscription that cost $413 at retail, and the New York Times estimates its customers were charged 30 to 40 percent more than the actual subscription cost of newspaper.
The Federal Trade Commission says it received thousands of complaints, as has the Better Business Bureau and the attorneys general in Oregon, Minnesota, Missouri, and Texas, the four other states involved in the suit. Many of the publishers whose publications were the subject of the scam notices have filed lawsuits and have issued cease-and-desist letters to the solicitation companies, the Democrat & Chronicle reports. They have published alerts on their web sited and notices in their publications to warn readers. In an affidavit that is part of the New York lawsuit, Dow Jones said it has spent $3.5 million responding to the unauthorized notices and has offered free subscriptions to those affected, according to Schneiderman’s news release.
The companies have used a variety of different names in their solicitations, including Associated Publishers Network, Magazine Payment Services, 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. The return address in the solicitations was usually in White City, Oregon, Henderson, Nevada, or Reno, Nevada, according to the Democrat & Chronicle.