HARRISBURG — Attorney General Kathleen G. Kane today announced her office has reached a $1 million settlement with an online marketing company accused of deceiving consumers through its marketing of language audio courses.
The settlement with Internet Order LLC is the result of a lawsuit that was filed last September by the Office of Attorney General’s Bureau of Consumer Protection. This settlement was made in conjunction with the Attorney Generals of Washington and New York, who also received complaints about the company.
Internet Order was accused of using “negative option” marketing in the sale of Pimsleur-branded language audio courses, meaning consumers’ failure to cancel the transaction after an initial purchase left them at risk for potentially being charged hundreds of additional dollars. In addition to the $1 million that will go toward restitution for consumers, Internet Order also agreed to change its business practices as part of the settlement.
“This company must make it clear to consumers exactly what they should expect to receive and pay,” Attorney General Kane said. “Consumers should now be provided with easy-to-read notices that will inform them exactly what they are purchasing.”
The settlement, which is subject to court approval, resolves the lawsuit, which also named Daniel Roitman, Internet Order’s chief executive officer, as a defendant. Internet Order also does business as Stroll, Pimsleur Approach and Pimsleurapproach.com.
According to the lawsuit, Internet Order, which has offices in Philadelphia, sells Pimsleur-branded foreign language-learning audio courses on various CDs. The company sells the audio courses primarily through its website www.pimsleurapproach.com, where it advertised the courses for “only $9.95.”
The lawsuit alleged that upon signing up for this offer, consumers were enrolled in a negative option plan, obligating consumers to receive up to four additional audio courses at a cost of $256 per course. Consequently, consumers were led to believe their total obligation was “only $9.95,” when it could be as high as $1,024.
The lawsuit alleged that if consumers called Internet Order to return the unwanted courses, they would be subjected to high pressure “save” techniques. Additionally, the lawsuit alleged the company would not refund consumers’ money unless it was returned within the 30-day “free trial.” Consumers also were required to pay return shipping, despite the company’s representation that the offer was “Risk Free” with a “100% Money Back Guarantee,” the lawsuit stated.
Under the terms of the settlement, Internet Order now must receive consumers’ “express informed consent” to the arrangement after clear and conspicuous disclosure of the material terms of the offer.
The $1 million that Internet Order is required to pay will be placed in a settlement fund for restitution to be provided to consumers who paid for these products from Internet Order but did not intend to continue receiving subsequent CDs.
The settlement agreement spells out a claims process for consumers who believe they were harmed by Internet Order. A claims administrator will send emails to consumers who purchased the CDs from Internet Order between Jan. 1, 2009 and April 1, 2013, and who unsuccessfully attempted to cancel within 45 days of the expiration of the “free trial” period. The email will give a link to a claim form with more directions on how to obtain a possible refund.
Consumers with questions about the settlement may call the Office of Attorney General’s Bureau of Consumer Protection at 1-800-441-2555. Consumers who believe they were harmed by this company’s negative option marketing scheme may file a written complaint with the Bureau at www.attorneygeneral.gov.