SEATTLE – The manufacturer of Silkies hosiery will pay $455,000 to settle a case with Washington and 14 other states regarding the company’s marketing and sales practices, Attorney General Rob McKenna announced today.
“Consumers who signed up to receive a free hosiery sample from HCI Direct experienced a snag when they were unknowingly enrolled in a plan to receive future shipments at a cost,” Assistant Attorney General Jack Zurlini said. “A free sample shouldn’t cost you anything.”
HCI Direct, Inc., of Bensalem, Penn., sells Silkies pantyhose and women’s undergarments through a mail-order program. HCI Direct mailed solicitations offering a free product sample. States alleged the company failed to clearly disclose to consumers that by responding to the offer, they would continue to receive additional shipments. Payment for one shipment automatically triggered the next, along with another bill.
The Washington Attorney General’s Office has received approximately 20 complaints about the company since 2005, including some from consumers who claimed they never ordered a sample but received unwanted shipments.
Under an Assurance of Discontinuance filed late Thursday in Thurston County Superior Court, HCI Direct denied the accusations but agreed to pay $455,000, part of which will fund public education programs in the 15 states. Washington’s share is $29,000.
The company also agreed to change its marketing practices and to refund consumers who claim they did not order merchandise shipped by the company.
The company must receive an affirmative response from consumers before enrolling them in a subscription plan and prior to providing any merchandise, including free samples. Its mailings must include a toll-free number, address, and Web site where consumers can cancel the service.
The following states participated in the settlement: Alaska, Delaware, Hawaii, Michigan, Montana, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington and Wyoming.
As a reminder to marketing and sales companies, an item is not “free” if a customer has to spend money to receive it. Advertisements that state “free with purchase” or “buy one, get one free” are legal, provided that the purchased item is offered at regular price.
Washington residents are eligible for refunds if they purchased unwanted shipments of merchandise. To receive a refund, file a complaint with the Attorney General’s Office, the Federal Trade Commission, the Better Business Bureau or HCI Direct.
Complaints can be filed with the Attorney General’s Office online at www.atg.wa.gov. Click on “File a Complaint.” Or call 1-800-551-4646 between 10 a.m. and 3 p.m. Monday-Friday to request a complaint form by mail. In your complaint, explain why you are seeking a refund.
Silkies Assurance of Discontinuance
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Media Contacts: Kristin Alexander, Media Relations Manager – Seattle, (206) 464-6432
Jack Zurlini, Assistant Attorney General, (509) 458-3538