Marketer of 9/11 Commemoratives Settles Charges It Deceived Consumers
National Collector’s Mint Inc., which sold 9/11-related coins and collectibles, including an exclusively authorized commemorative honoring the 10th anniversary of the September 11, 2001 attacks, has agreed to pay $750,000 to settle Federal Trade Commission charges that it deceived consumers, charged them for items they never ordered, and failed to properly mark its imitation items with COPY.
According to the FTC’s complaint against National and its president, Avram Freedberg, the defendants claimed their 9/11 coins were exclusively authorized, but their 9/11 commemoratives were imitations and were not marked “COPY,” as required by the Hobby Protection Act.
In the Summer of 2010, Congress authorized the U.S. Mint to manufacture and sell a 10th anniversary 9/11 commemorative medal, the complaint noted. It added that because of consumer confusion with National’s products, the U.S. Mint issued a consumer alert warning that its medal was “the only official United States coin or medal to commemorate the 10th anniversary of the September 11th attacks.”
The FTC alleged that National’s ordering and returns process was misleading and deceptive. According to the FTC, National’s television commercials directed consumers to an automated telephone ordering system to order products via voice or touch keypad recognition but 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. National allegedly failed to provide the total cost of the purchase, a breakdown of the items ordered, and critical refund policy terms, and its lengthy and confusing ordering system resulted in many consumers receiving products they did not order, according to the FTC.
According to the FTC, consumers who tried to return items found that, contrary to National’s promise, the return process was not simple and prompt, and it frequently involved previously undisclosed conditions. 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, the FTC alleged.
The proposed settlement agreement permanently prohibits the defendants from misrepresenting material facts about any product or service, and requires that it clearly disclose, before a customer consents to pay for anything, the total costs and fees, any refund policy, and any material limitation or condition that applies to any “Satisfaction Guarantee” or similar representation. The settlement also bars them from violating the Telemarketing Sales Rule, the Unordered Merchandise Statute, and the Hobby Protection Act.