Telebrands Settles FTC Lawsuit With $800,000 Payment

Posted on by Chief Marketer Staff

Ajit J. (Ajay) Khubani of Franklin Lakes, NJ, is paying the Federal Trade Commission $800,000 to settle a lawsuit against his firm, Telebrands Corp., for allegedly violating as 1996 agreement involving the agency’s mail and telephone-order rules.

The suit-ending agreement, approved last Wednesday by U.S. District Judge James C. Turk in Roanoak, VA, also requires Khubani, who admitted no wrongdoing, to hire an independent watchdog to monitor the operations of his Fairfield, NJ-based firm. The monitor is to file periodic reports with the court.

Telephone calls to Khubani, whose firm markets a variety of products by phone and through direct response print and television ads, were not returned by press time.

Three years ago Khubani and his firm paid $95,000 in civil penalties to settle allegations that they failed to fill customer orders promptly, notify customers about fulfillment delays, and pay refunds on canceled orders.

In this latest action, the FTC, which has sued Khubani, Telebrands, and its predecessor, Direct Marketing of Virginia numerous times over the last 15 years for similar alleged violations, failed to live up to the terms of the 1996 settlement agreement.

Specifically, the agency alleged that notices of shipment delays were sent out late to customers and delaying the fulfillment of orders without first obtaining the customer’s agreement.

In 1996 Khubani settled civil fraud lawsuits against him and his company over the marketing of a personal hearing device, by 17 state attorneys general and the federal Food and Drug Administration for $500,000.

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