American Family Publishers, Jersey City, NJ, and New York State Attorney General Dennis C. Vacco concluded an $800,000 settlement that will compensate at least 12,000 New Yorkers for allegedly being misled by AFP’s promotions of its $11 million sweepstakes, his office says.
According to New York AG office spokesmen, AFP has agreed to create a consumer fund which will provide $60 to each customer provided that they ordered at least six subscriptions between November 1996 and November 1997 and purchased at least one in December 1997 or January 1998.
New Yorkers eligible for consumer fund payments will receive compensation checks by late September, the AG’s office says.
The consumer fund is the first of its kind in any AFP settlement, Vacco’s office says.
AFP has also agreed to pay $50,000 to New York State as part of the agreement. In addition, the company agreed to retain an independent administrator to process the consumer payments.
Although AFP admitted no wrongdoing, the settlement requires the company’s mailings to clearly state “money back guarantee” and “no purchase is necessary” policy statements in its mailings. The company must also stop billing entrants twice during a 28-day period for the same magazine (a practice that led some consumers to pay twice for the same order), and must set up a toll-tree telephone line to assist consumers.
Florida, Indiana, Connecticut, West Virginia and South Carolina have all filed suits against AFP claiming the AFP mailings violate various state statutes.