NEW YORK (CBSNewYork/AP) – The company behind the Snuggie, Perfect Bacon Bowl and other “As Seen on TV” products has agreed to pay $8 million to settle charges that it deceived customers.
The Federal Trade Commission said Thursday that Allstar Marketing Group promised customers buy-one-get-one free promotions, but some were still charged for the items in the form of high processing and handling fees.
The FTC said costumers were led to believe they would be getting two $19.95 products for less than $10 each, but actually paid $35.85 when a processing and handling fee was applied.
Allstar will pay $7.5 million to the FTC to create a fund for customer refunds. The other $500,000 will be paid to the New York attorney general’s office for penalties, costs and fees.
Allstar said it has already made changes to its business to make costs easier to understand.
“While we have always believed our processes complied with the law, we are proud to have successfully worked with the FTC and the NY AG to improve them and set new standards for transparency,” Jennifer De Marco, general counsel at Allstar, said in a written statement.
Some customers were also sold more products than they intended to buy. The New York attorney general said one customer who wanted to buy two $19.95 Perfect Brownie Pans was charged $105 for six of them after being confused by an automated phone call. The customer was unable to get a refund, the attorney general said.
Allstar, which is based in Hawthorne, New York, sells products such as Chop Magic, Cat’s Meow and Topsy Turvy through TV commercials, websites and in stores.
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