The Department of Consumer Affairs says that Telebrands, the company which created the "As Seen On TV" marketing concept, has violated certain terms in the Consumer Fraud Act. The five-count civil suit states that the company had performed deceptive practices by charging consumers for merchandise they did not intend to purchase and for initiating product prices that are deceptive.
Investigators made undercover purchasing of products from Telebrands and found that the company's automated ordering system would coerce the caller to purchase as much as 7 more products. Calls are said to last for a half hour and more. Customers who wanted to talk to a phone operator are usually unsuccessful to gain connection.
The investigators also found out that there's a fraud in the company's "money-back-guarantee." When they tried to return some products, they had to wait as the call was placed on hold. Later on, they would hear a busy tone which means that they got disconnected.
"As demonstrated by its alleged actions, Telebrands cannot be trusted to do right by its customers or to even honor its own 2001 pledge to follow our consumer protection laws," said John Hoffman, acting attorney general. "We are bringing this action to end the abusive business practices that Telebrands allegedly is inflicting upon consumers."
Telebrands is a company that sells "special offer" and "limited time" products on TV such as Chefdini, HeelTastic, and the no-spill Wow Cup. AJ Khubani, Telebrands president, is credited with concocting the logo "As Seen On TV" that is used in the stores for displaying merchandise. The non-trademarked slogan is also used by other merchandising companies which are into using infomercials in order to sell products directly to shoppers.
"We take pride that for more than three decades, tens of millions of consumers have trusted Telebrands for delivering innovative products," said Khubani in a statement.
The company is confident that the court charges would be quickly resolved. "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," added Khubani.
The state wanted restitution for the affected shoppers. It also asked for civil penalties and reimbursement of money spent on the attorneys and the investigation that was made.
Telebrands, which had sparked 340 complaints between 2012 and 2014, is accused of committing five violations under the state's Consumer Fraud Act. According to the act, a civil penalty can reach up to $10,000 for every violation. Based on the violated terms that the company has committed in its own pledge made in 2001, the state has enhanced the civil penalty of up to $20,000 for every violation.
