A telemarketing company, barred by court order from engaging in fraudulent magazine subscription marketing, is still attempting to collect money that consumers say is the result of phony billing.
Numerous consumers have contacted ConsumerAffairs.com in recent weeks to say a collection agency, allegedly acting on behalf of Consolidated Media Services, has demanded as much as several hundred dollars for charges they say go back as far as 1997.
"I received a phone call in 1997 from a telemarketer. I can't remember all the details exactly, but a short time after the call I started receiving many magazines that I did not request. I tried to cancel but was told that I could not and I ended up paying them over $200," said Laura, of Pembroke, Massachusetts.
"In December 2005 I got a phone call stating I am in collection because of CMS and that I owe over $400."
Laura's story is typical. A number of consumers, who ended up paying CMS years ago for magazines they didn't want or which they never received, are apparently being hit up again.
It's suspiciously similar to a practice called "reloading," in which scam artists work from a list of victims who fell for a scam in the past. The theory is, if they fell for it once, chances are, they'll fall for it again.
Only this time they aren't being sold magazine subscriptions, they are being told they owe money for subscriptions they purchased in the past. The consumers contacting ConsumerAffairs.com insist they either paid money to CMS or cancelled the subscriptions.
As it turns out, CMS and its myriad of affiliated companies have a long history of generating consumer complaints.
In 2003 the parent company of CMS, along with its principals, agreed to settle Federal Trade Commission charges that the company violated numerous federal laws in the marketing of its magazines.
The settlement bars deceptive sales practices and requires the companies to monitor claims and disclosures their sales agents make. In addition, the corporations agreed to a $1.1 million civil penalty, which the government agreed to reduce to $350,000 because the companies allegedly didn't have that much assets.
The settlement with Dennis H. Gougion, an officer of the companies, similarly bars deceptive sales practices and required him to post a $1 million performance bond if he engaged in telemarketing or assisted others engaged in telemarketing in any way other than performing specified publisher-seller liaison responsibilities.
Gougion also agreed to a $100,000 civil penalty, which was knocked down to $10,000 because of his financial status. But in hindsight, the government showed remarkable leniency.
The FTC reduced Gougion's and CMS' penalties despite the fact that in 2003, both were already under an FTC order that had been issued in 1996. According to the Justice Department and the FTC, Gougion and other principals of CMS and their affiliate companies had, in 2002, engaged in alleged illegal acts that violated the FTC order they had agreed to seven years earlier.
None of the complaints received by ConsumerAffairs.com last month alleged CMS is now pushing magazine subscriptions in violation of the court order. Instead, they all say a collection agency is trying to extract more money from them. What they all have in common is the fact they paid money to CMS in the past.
"I was contacted by LBA & Assoc this morning saying I owed $155 to Consolidated Media Services from a magazine subscription from Oct. 1999, almost 7 years ago," Elizabeth, of Tampa, told ConsumerAffairs.com.
Elizabeth said she paid CMS $311 in 1999 and never received any magazines.
Glenn, of Rancho Cucamonga, California said CMS is attempting to collect money it claims is owed from 2000. But Glenn also says the debt was paid long ago.
"After the first year I cancelled the subscriptions and have never received a magazine since. About 3 months ago I got a call from a collections agency. The man explained that my account was delinquent and that I had to make a payment of $74," he said.