Hill
In a story line that has become familiar over recent months, Indiana Attorney General Curtis Hill recently resolved two additional cases in which promotional firms sent allegedly deceptive mailings to Hoosiers indicating recipients were winners of significant prizes.
Xcel Media Group Inc.
Xcel Media Group Inc. contracted with several Indiana motor vehicle dealers to conduct direct mail advertising for sales events.
The company allegedly sent mailings to 254,640 Indiana residents indicating that recipients were winners of significant prizes such as $25,000 cash, an Apple watch, a large Walmart gift card or a 55-inch HDTV. The mailings did not contain proper disclosures as required by Indiana law.
The mailings instructed recipients to attend a specific sales event at a sponsoring dealership to claim their prizes. Once at the sales event, the recipients of the mailings were informed by the dealers they had not won the prize represented on the mailings but instead were “winners” of a nominal item such as a $5 Walmart gift card.
The state alleged that Xcel Media Group Inc.’s misrepresentations and actions were unfair, abusive and deceptive — and constitute violations of Indiana’s Deceptive Consumer Sales Act and Promotional Gifts and Contests Act. Under a consent agreement, the company is now enjoined from sending any mailings to any Indiana addresses that offer prizes to recipients. Xcel Media also will pay a civil penalty in the amount of $130,000 to the State of Indiana.
Dealer Direct Service LLC
Dealer Direct Service LLC and its owner, David Billman, also contracted with Indiana motor vehicle dealers to conduct direct mail advertising for sales events. The company allegedly sent mailings to 190,000 Indiana residents to advertise the various sales events.
The mailings indicated that recipients were winners of a significant cash prize, specifically $5,000. The mailings did not contain proper disclosures as required by Indiana law.
The mailings instructed the recipients to attend a specific sales event at a sponsoring dealership to claim their prize. Once at the sales events, the recipients of the mailings were informed they had not won $5,000 as represented on the mailings but instead were “winners” of a nominal item, such as a scratch-off lottery ticket or “vacation” voucher of little or no value.
The state alleged Dealer Direct Service LLC and David Billman’s misrepresentations and actions were unfair, abusive and deceptive — and constitute violations of Indiana’s Deceptive Consumer Sales Act and Promotional Gifts and Contests Act.
Under a default judgment, Dealer Direct Services and David Billman are enjoined from sending to any Indiana address any mailing representing that the recipient won, or may win, a prize. The judgment also requires Dealer Direct Services and David Billman to pay a civil penalty to the State of Indiana in the amount of $380,000.
“The more we have looked into this particular type of deceptive activity, the more common we have found these mailings to be,” Hill said. “To protect Hoosier consumers, we will continue working on this issue and continue taking steps to ensure that offenders clean up their acts.”