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NJ authorities go to court to put ‘As Seen on TV’ company out of business

Photo Credit: Cliffview Pilot File Photo

AS SEEN HERE FIRST: The New Jersey company known for its “As Seen on TV” products used illegal tactics to sell “Instabulbs,” the “Olde Brooklyn Lantern” and the “Pocket Hose” to investigators, say state authorities who aim to shut it down.

The state Attorney General and Division of Consumer Affairs have filed a complaint against Telebrands Corp. of Fairfield, alleging a series of violations of New Jersey’s Consumer Fraud Act.

Specifically, the complaint says, the company:

  • subjected customers on the phone and online to a lengthy ordering process, sometimes lasting over half an hour;
  • “aggressively solicited” additional products without giving consumers an option to decline;
  • didn’t let customers edit their virtual shopping carts;
  • didn’t let customers confirm the merchandise ordered before authorizing charges;
  • didn’t provide a total cost of each order;
  • charged and sent additional merchandise that customers didn’t order.

What’s more, the state says, Telebrands didn’t specify any purchase, cancellation or return policy and didn’t give customers an opportunity to talk with a live representative after patching them through to an automated phone line.

Those who shopped online didn’t know when their orders were completed and had trouble declining offers of additional products pushed on them — in part, because the “No Thanks” link was obscured “through the use of small text and a light color,” the state complaint charges.

Customers received “non-conforming merchandise” and “merchandise that they did not order,” it adds. When they tried to return it, they had to pay for shipping.

“Consumers were repeatedly pressured through gimmickry misrepresentations, and high-pressure sales tactics to buy products they didn’t want,” Acting Consumer Affairs Director Steve Lee said.

What’s more, Lee said, those who tried to return unwanted products and get refunds “couldn’t reach actual customer service representatives and were subjected to return policies that differed from what was represented in ads and on the company’s web site.”

“We take pride that for more than three decades, tens of millions of consumers have trusted Telebrands for delivering innovative products,” A.J. Khubani, president of Telebrands, said in a statement. “Consumer satisfaction is always our top priority. We are confident that this matter with the state of New Jersey will be resolved in short order.”

State authorities sued Telebrands before — and in 2001 obtained a final consent judgment and order requiring the company to comply with the Consumer Fraud Act.

Yet from 2012 through last month, they received 340 consumer complaints about the company’s business practices.

DCA investigators made several undercover purchases of products advertised and offered for sale by Telebrands through its website and toll-free number featured in TV commercials and infomercials.

During an “Instabulb” purchase, an investigator was solicted for at least seven additional products, state authorities said. Others were placed on hold for long periods of time — or disconnected.

A DCA who tried returning an “Olde Brooklyn Lantern” for a refund had to make four calls to an 800 number after being disconnected twice and placed on hold once, the complaint says.

After finally getting someone, the investigator was instructed to call another toll-free number, which connected him to the Telebrands IVR System.

After being placed on hold, the investigator was told by a Telebrands customer service representative that the return couldn’t be processed without a credit card number.

The investigator then asked to speak with a supervisor and, after three minutes, was again asked for a credit card number — even though the refund policy posted on the company’s web site stated otherwise.

During an undercover purchase of the “Pocket Hose,” an investigator was asked for an email address. Two days later, the investigator received an email: “Welcome to Everyday Family Savings.” It said he would be enrolled in an “Everyday Family Savings” program at a cost of $19.95, which would automatically renew each month unless he called that day to cancel.

All this proves that Telebrands “cannot be trusted to do right by its customers or to even honor its own 2001 pledge to follow our consumer protection laws,” Acting Attorney General John J. Hoffman said.

The state’s complaint alleges that Telebrands violated the Consumer Fraud Act by “engaging in unconscionable commercial practices; making false promises and/or misrepresentations; and knowingly omitting material facts, in violation of the Consumer Fraud Act.”

It also says the company “violated the Advertising Regulations by obscuring material facts (i.e., processing fees) and using misleading terms (i.e., “SPECIAL OFFER”) in its product infomercials and other advertisements.”

Investigator Elizabeth Perry in the DCA’s Office of Consumer Protection conducted the investigation, assisted by Investigator Michael Meola.

Deputy Attorney General Natalie A. Serock in the Consumer Fraud Prosecution Section of the Division of Law is representing the state.

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