Marketer Of Snuggies, Perfect Brownie Pans, Others Must Pay $8m For Deceiving Consumers

The marketer of products such as Snuggies and Magic Mesh door covers must pay $8 million to settle charges of deceiving consumers. The marketer of popular “as-seen-on-TV” products such as Snuggies, Magic Mesh door covers and Perfect Brownie Pans must pay $8 million to resolve federal and state charges it deceived consumers with promises of buy-one-get-one-free promotions and then charged exorbitant fees for processing and handling, nearly doubling the cost of the products. The Federal Trade Commission announced Thursday that Allstar Marketing Group, LLC, agreed to pay $7.5 million to the agency for restitution to consumers and $500,000 to the New York Attorney General’s Office for allegedly deceiving consumers about the cost of its products marketed through commercials. According to the FTC complaint [PDF], since at least 1999, New York-based Allstar deceived consumers by failing to disclose additional fees associated with its frequent buy-one-get-one-free offers used to sell products such as Cat’s Meow, Roto Punch, Perfect Tortilla, Forever Comfy. The FTC cites a recent commercial for the Magic Mesh door cover in which the narrator claims the company will “double the offer, just pay separate processing and handling fees.” The commercial goes on to describe the purchase as “two Magic Mesh curtains for $19,95, that’s less than $10 each.” However, the FTC complaint alleges that the narrator never discloses that Allstar charges $7.95 in “processing and handling” fees for each Magic Mesh purchased. Additionally, it is never disclosed that consumers can not decline the second free Magic Mesh curtain, meaning that the minimum processing and handling fee charged is actually $15.90, according to the complaint. When the purchase is calculated after the fees are added, the price of the product jumps to $35.85, nearly double the advertised price. In addition to deceptive commercials, the FTC claims that Allstar further deceived consumers when they initiated a purchase either by phone or online. Consumers who called Allstar were often immediately instructed to enter their personal and billing information and subsequently charged for at least one set of products, before they were able to indicate how many products they wanted. The FTC says that because the company’s sales pitch was often confusing, many consumers purchased more sets of the product than they actually wanted. Once the initial sale was recorded, Allstar then attempted to upsell additional goods or services. “As with Defendant’s main offer, the ordering process for the various upsell offers is deceptive and misleading, and the total cost associated with the upsells is not disclosed during the telephone call,” the complaint states. For example, when ordering the Magic Mesh, consumers are promoted to use a keypad or say the number of “additional buy-one-get-one-free” sets, however, the cost of these products are never disclosed.