An estimated 5,500 consumers within and outside Tennessee will be eligible for refunds following an agreement earlier this week that permanently stops an East Tennessee group from conducting alleged unlawful telemarketing practices.
U.S. District Judge Ronnie Greer signed final agreements that provide an estimated $1 million to consumers who were harmed by the companies' alleged deceptive business practices.
Attorney General Bob Cooper filed suit earlier this year on behalf of the Tennessee Department of Commerce and Insurance (TDCI) Consumer Affairs Division against several East Tennessee telemarketing firms and their operators.
COERCIVE TACTICS CITED
The state's investigation focused on one of the top consumer complaint generators at the time in Tennessee .
The firm was running alleged boiler room-style operations which included using coercive tactics to sell long-term magazine subscriptions.
The agreement indicates that, during their six years, the defendants took in a combined $20 million in ill-gotten gains from consumers throughout the United States.
While agreeing that the money generated was ill-gotten, the defendants have denied liability under the terms of the agreements.
"We are pleased to be able to provide these consumers with some relief as a result of the court's decision," Cooper said in a news release.
"Our law enforcement action was commenced not just due to few complaints but thousands of similar accounts from people, some of whom were on the Do Not Call Registry, who said they were verbally harassed and deceived by telemarketers," Cooper said.
Those named in the lawsuit are Mountain Area Communications, LLC, American Publisher's Service, LLC, Shawna R. McDonald, Eric N. McDonald, Zachary F. Haverland, Christopher M. McDonald, and G.H. McDonald.
They are alleged to have broken several laws, including the federal telemarketing law and state consumer protection laws.
HOW TO GET RESTITUTION
Persons who have not yet filed a complaint have until Feb. 11, 2013, to file a complaint with the Division of Consumer Affairs to receive restitution.
"Anyone who suspects they may have been a victim in this case is encouraged to contact our office to file a complaint," said Gary Cordell, director of the TDCI Consumer Affairs Division.
Consumers may file a complaint online at http://www.tn.gov/consumer/ or by calling the Division at (800) 342-8385 (toll-free in Tennessee) or (615) 741-4737.
EXPEDITED LAST MONTH
The attorney general obtained a temporary restraining order, asset freeze and the appointment of a temporary receiver, while the case proceeded on an expedited basis in October.
In addition, while trial preparations were under way, the state brought contempt of court charges against Shawna R. McDonald, Eric McDonald and G.H. McDonald, alleging they wrongfully used frozen business accounts to pay legal fees without seeking the court's permission.
Judge Greer ruled that the defendants were likely in contempt, but before making a final ruling, allowed the defendants additional time to present evidence in defense.
Several of the defendants then settled with the state.
The remaining defendants filed papers with the court two weeks ago which Greer has now approved.
In addition to making restitution, the defendants are barred from making misrepresentations in the sale of goods or services, and are required to surrender major assets including real estate, bank accounts and vehicles.