A manufacturer of commemorative coins used television ads to sell them, but misrepresented the nature of the product and committed other infractions. It has reached a settlement over the matter with the Federal Trade Commission.
National Collector’s Mint Inc. was selling 9/11-related coins and collectibles. It claimed one of its offerings was “exclusively authorized” to honor the 10th anniversary of the 9/11 attacks.
In fact, the US Mint was “exclusively” authorized by Congress to issue the anniversary piece. NCM was therefore required to clearly label its own piece as a COPY. Further, the FTC said it charged consumers for items they did not order.
The FTC alleged “…that the defendants’ ordering and returns process was misleading and deceptive. The defendants’ television commercials directed consumers to an automated telephone ordering system to order products via voice or touch keypad recognition. The ordering system presented offers for additional products that consumers could not bypass, and often registered sales orders even when consumers indicated, repeatedly, that they wanted no additional items. The defendants allegedly failed to provide the total cost of the purchase, a breakdown of the items ordered, and critical refund policy terms, and their lengthy and confusing ordering system resulted in many consumers receiving products they did not order.”
The process of getting refunds was convoluted and difficult. “Consumers were told they could return items within 30 days for a full, prompt refund. But the defendants allegedly failed to disclose that consumers would have to pay for insurance and shipping first, and that, for purchases exceeding $100 they would have to obtain a return authorization number from a live telephone operator. Many consumers found it difficult to reach a live person, and those who did often got the runaround.”
NCM agreed to pay $750K, and is to refrain from failing to properly label and market its products. Further, its obligation to make accurate representations must apply to return policies as well as to products.