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Christine Baker
Board Administrator
Username: Admin

Post Number: 462
Registered: 08-2002
Posted on Monday, February 03, 2003 - 06:56 pm:   Edit Post Delete Post Print Post    Move Post (Moderator/Admin Only)

FTC settlement with American Family Publisher

FOR RELEASE: JULY 14, 1992

MAGAZINE SUBSCRIPTION MARKETER AGREES TO SETTLE
FTC CHARGES THAT IT APPROVED DECEPTIVE
DEBT COLLECTION PRACTICES
American Family Publishers (AFP) has agreed to settle
Federal Trade Commission charges that it violated the FTC Act
when it hired collection firms and knowingly approved or assisted
their use of deceptive debt collection practices. Under the
proposed settlement agreement, AFP would be required, among other
things, to instruct its debt collectors to comply with the Fair
Debt Collection Practices Act (FDCPA) in the future.
AFP is one of the largest sellers of magazine subscriptions
in the United States. According to the FTC complaint issued in
April 1990, AFP used debt collection agencies to send consumers
deceptive attorney collection letters that were on the letterhead
of attorneys. Further, the FTC charged, AFP knew of and approved
attorney letters in which its collectors misrepresented that AFP
intended to take legal action against the recipient consumers.
In fact, the FTC alleged, no attorneys were actively or substan-
tially involved in the collection of the debts at issue, and no
legal action was about to be initiated if the debts were not
paid. The complaint alleges that AFP's actions violated Section
5(a) of the FTC Act, which prohibits unfair and deceptive acts or
practices.
Under the proposed consent agreement settling these charges,
AFP would be prohibited from misrepresenting that an attorney is
actively and substantially involved in the collection of any
debt, and that legal action with respect to any alleged debt is
about to be, or will be, initiated. AFP also would be prohibited
from failing to instruct any debt collector it retains, engages
or employs to comply fully with all the provisions of the FDCPA.
In addition, under the proposed order, if AFP sells its
accounts to debt collectors, it must:
- more -
American Family Publishers--07/14/92)
-- not encourage the debt collector to misrepresent
the degree of attorney involvement or the extent of
legal action resulting from a debtor's failure to pay a
debt;
-- take steps to determine whether the debt collector
is making these misrepresentations;
-- not sell accounts to a debt collector when it has
knowledge that the collector is making these misrepre-
sentations; and
-- notify the FTC when it terminates a sale to a debt
collector because it had knowledge that the debt col-
lector engaged in these misrepresentations.
American Family Publishers is a joint venture partnership of
The Time Incorporated Magazine Co. and AFP Associates, a three-
member partnership. AFP is based in Newark, New Jersey.
The proposed consent agreement is scheduled to appear in the
Federal Register shortly and will be subject to public comment
for 60 days, after which the Commission will decide whether to
make it final. Comments should be addressed to the Office of the
Secretary, Federal Trade Commisssion, 6th Street and Pennsylvania
Avenue, N.W., Washington, D.C. 20580.
NOTE: A consent agreement is for settlement purposes only and
does not constitute admission of a law violation. When the
Commission issues a consent order on a final basis, it carries
the force of law with respect to future actions. Each violation
of such an order may result in a civil penalty of up to $10,000.
Copies of the proposed consent agreement and an analysis to
assist the public in commenting, as well as the news release
announcing the charges, are available from the FTC's Public
Reference Branch, Room 130, same address as above; 202-326-2222;
TTY 1-866-653-4261.
# # #
MEDIA CONTACT: Brenda A. Mack, Office of Public Affairs
202-326-2180
STAFF CONTACT: David Medine, Bureau of Consumer Protection
202-326-3224
or
Roger J. Fitzpatrick, Bureau of Consumer
Protection, 202-326-3172
(FTC Docket No. 9240)
(AFP-2)

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