Attorney General Hardy Myers today announced that one of the largest mail order jewelry businesses in the United States can no longer market its direct-mail sweepstakes to Oregonians and must provide full refunds for jewelry to requesting consumers.
Named in an Assurance of Voluntary Compliance (AVC), filed today in Marion County Circuit Court, are Seta Corporation of Boca, Inc., a Delaware corporation whose principal offices are in Boca Raton, Florida and Catalog Network Services (CNS), owned by the same parties as Seta with offices in Cincinnati, Ohio. The AVC does not admit violation of law.
"We sued this company last year after investigating allegations from Oregon consumers including elderly citizens and their families of fraudulent sweepstakes solicitations," Myers said. "The company ignored warnings from the Department of Justice and another state Attorney General forcing us to take legal action. Today's settlement agreement stops the deceptive practice and assists those that suffered financially."
Department of Justice investigators found that Seta's combination sweepstakes entry and jewelry/cosmetics order form confused consumers and many concluded that they had to buy merchandise to enter the sweepstakes. Others were convinced that they had won or were about to win the sweepstakes and spent thousands of dollars a year buying product when they entered the sweepstakes. Some of the customers received four or more mailings per day from Seta.
Investigators found that the promotions told consumers they had won $25,000 but that they first must sign a publicity release and complete an entry/order form that included an order form to purchase jewelry. Disclaimers of "no purchase necessary" and "odds may vary" were found in small type on the forms. There were no separate rules for entry without purchase.
Attorney General Myers' Financial Fraud/Consumer Protection section received 35 written complaints against Seta. In addition, the Justice investigation produced a list of more than 300 Oregonians who had done business with the mail order company.
In the settlement, Seta agrees to refund the full purchase price of jewelry to Oregonians who return the product with a written request. The company must provide quarterly reports to Justice that include the names and addresses and refund amounts paid to each consumer. Seta paid $200,000 to the Department of Justice consumer protection and education fund.
The Oregon Department of Justice, over the last three years, has filed court actions against other sweepstakes companies including American Express Publishing Company, U.S. Purchasing Exchange, Reader's Digest, Time, Inc. using the name of Guaranteed and Bonded, and American Family Publishers. Attorney General Myers sued Publishers Clearing House in January 2000 and a trial date is set for September 2001.
Attorney General Myers warns consumers that sweepstakes promotions must contain the odds of winning a prize, rules for entering without purchase and that consumers never have to pay to participate in a legal sweepstakes. Myers also reminds consumers to carefully check sweepstakes promotions for:
Charges other than the cost of postage.
Hints that there is government sponsorship. (Governments don't sponsor or approve sweeps.)
Requests for personal information in order to participate.
Any promotion that resembles a check, bill or invoice.
Unreasonable shipping and handling charges.
Confusing or misleading information.
False claims of non-profit sponsorship. Call the Department of Justice Charitable Activities office at (503) 229-5725 to see if the charity is actually participating in the sweepstakes and if it is legally registered with Justice.
Consumers seeking refunds from Seta for the purchase price of jewelry should return the product with a written refund request to Seta Corporation, 6400 East Rogers Circle, Boca Raton, Florida 33499.
For information on this court action and sweepstakes in general, call the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only), toll-free at 1-877-877-9392 or online at www.doj.state.or.us.
an Margosian, (503) 378-4732 (media line only)
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