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Posted January 2003
FOR IMMEDIATE RELEASE:
January 23, 2003
FOR FURTHER INFORMATION CONTACT:
Genene Morris (973)504-6327
NEWARK —New Jersey is suing two New York-based corporations operating out of Northern New Jersey for allegedly defrauding consumers in connection with their marketing, advertising and/or sales of various products to consumers throughout the United States, Attorney General David Samson and Consumer Affairs Director Reni Erdos said.
The State's three-count lawsuit, filed in Hudson County Superior Court, names as defendants GT Merchandising & Licensing Corp. ("GT Direct"), and GoodTimes Entertainment Limited ("GoodTimes Entertainment"), the manufacturers and/or distributors of such widely known consumer products as: Richard Simmons weight loss and exercise videotapes, vitamins and other diet products; Charlton Heston Bible videotapes and audiotapes; COPA hair products; Turbo Cooker cooking pans and accessories; The FIRM exercise products; and Cableflex exercise system.
On Tuesday, Hudson County Superior Court Assignment Judge Arthur D'Italia issued an order restraining the defendants from, among other things, further engaging in the practices alleged in the Verified Complaint and destroying relevant documents that are in their possession. In addition, Judge D'Italia ordered the defendants to appear in court on February 21 during which time the defendants are expected to answer the State's allegations and show cause why a preliminary injunctive order should not be entered against them.
The State's complaint alleges the defendants violated New Jersey's Consumer Fraud Act by deceiving consumers who ordered products in response to the defendants' television infomercials, web sites or magazine advertisements. GT Direct and GoodTimes Entertainment have a principal place of business at 16 East 40th Street, New York, New York. At all times relevant to the State's allegations, GT Direct and GoodTimes Entertainment have maintained principal business addresses at 108 Industrial Drive and/or 201 Port Jersey Boulevard in Jersey City, New Jersey.
GT Direct is also known as and has been registered to conduct business in New Jersey under the alternate names of: GoodTimes Direct; GoodTimes Vitamins, COPA Distributors; Unlimited Energy; GoodTimes Products; GT Direct; and The FIRM. GoodTimes Entertainment is also known as and has been registered to conduct business in New Jersey under the alternate name of GTK.
As of December 31, 2002, the Division of Consumer Affairs has received 330 consumer complaints from throughout the United States, including New Jersey, and from Canada.
"Companies that advertise and do business in the State of New Jersey have a responsibility to adhere to the State's rules and regulations that govern their activities," Governor James E. McGreevey said. "Failure to do so, will subject violators to legal action by the State, as this case clearly shows."
The State's complaint alleges that the defendants attracted consumers through their television infomercials that often feature celebrities -- such as Richard Simmons, Charlton Heston and Jackie Chan -- and that include product demonstrations, consumer testimonials and ordering information.
"Consumers who ordered products from the defendants were then subjected to problems with obtaining refunds or replacement merchandise; aggressive sales pitches for other products; unauthorized charges on their credit cards; and over billing," Attorney General Samson said. "This is not only bad business, it's against New Jersey's consumer protection laws."
Sometimes, consumers who called to order one product, would be repeatedly sent and/or charged for additional products without their authorization. In other instances, the State's complaint alleges, the defendants have charged consumers for merchandise whether authorized or not that the consumers never received. The defendants have also provided consumers' credit card information to other vendors, without the consumers' knowledge or authorization. Afterwards, the State's complaint alleges, the other vendors have posted charges to the consumers' credit cards for certain memberships which were unauthorized. In addition, the defendants have failed to provide consumers with any invoice or written information demonstrating how much consumers were actually charged for the products and shipping and handling.
"The defendants' alleged activities have caused some consumers to cancel their credit cards in an attempt to prevent the unauthorized charges to their accounts," Erdos said. "Consumers should not have to take such measures to keep a company from defrauding them."
A Consumer Affairs investigator made an undercover purchase of The FIRM exercise products from a television infomercial produced by the defendants. The merchandise included three exercise videotapes and the "Fanny Lifter," a two-level platform stepper. The merchandise sold for three payments of $29.95, plus shipping and handling. The infomercial also stated that if consumers called within 16 minutes of seeing the infomercial, additional items would be provided to the consumer at no extra charge.
When the investigator called the "800" number listed during the infomercial and stated she wanted The FIRM products that were advertised, the representative began aggressively pitching other products, including a 60-day supply of the FIRM Formula (at a cost of $12.95, plus shipping and handling) which would be sent every other month, various sets of videotapes and a Weight Starter Kit, which contained three sets of hand weights. The investigator repeatedly declined the additional products and only ordered The FIRM exercise products advertised during the infomercial.
Approximately two weeks after she placed the order, the investigator received a package from the defendants containing The FIRM items ordered, including the free items. Although the invoice indicated that the merchandise was paid for, it did not indicate how much the investigator was actually charged. Credit Card statements later showed a charge of $50.29 and two charges of $29.95.
A couple days after the investigator received The FIRM products, she received another package from the defendants which contained The FIRM Formula, which the investigator had declined to purchase. An accompanying letter explained that additional supplies of The FIRM Formula would be automatically shipped every 60 days. The letter, however, did not contain information on how to return or cancel the order. Approximately two months later, the investigator received another 60-day supply of The FIRM Formula. The investigator was billed $33.40 for each shipment of The FIRM Formula, far more than the $12.95 previously quoted at the time the investigator placed her order for the advertised products.
New Jersey's suit seeks to have the defendants pay restitution to affected consumers, and pay civil penalties, investigative costs and the State's attorneys fees.
Deputy Attorney General Lorraine K. Rak of the Division of Law is handling this case for the State.
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