FTC Wins $39m Ruling Against Telemarketer

19 March 2002

The Federal Trade Commission has been awarded $39 million ($44m; £27m) following a contempt-of-court ruling against magazine subscription clearing house Diversified Marketing Service and several connected firms and individuals in Oklahoma City.

In 1996, DMS was accused of a number of dubious sales practices, such as telling customers they could not cancel four-year subscriptions and threatening them with bad credit ratings.

At the time, the firm agreed to end such practices, but the FTC claims they continued, leading to the $39m award, an amount the federal agency says represents payments made to DMS by subscribers.

The ruling – the largest ever against a telemarketer – was made by a US District Court last week, but came to light only yesterday. Sharing in the fine alongside Diversified are National Magazine Service, Magazine Club Billing Service, NPC Corporation of the Midwest, C H Kuykendall, H G Kuykendall Jr and H G Kuykendall Sr.

Responding to the judgement, the Magazine Publishers of America said it supported “the enforcement of current laws designed to protect consumers and our brands.”

Data sourced from: AdAge.com; additional content by WARC staff