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Snuggie Marketer to Pay $8 Million For ‘Deceptive’ Sales

March 5, 2015
Personal Finance
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The folks who sold us Snuggies were ripping people off? Say it ain’t so!

Allstar Products Group, the marketing company behind wearable blanket Snuggie, Perfect Brownie Pans and other “As Seen on Television” products, agreed to pay a total of $8 million to the Federal Trade Commission and the New York Attorney General’s office for what the FTC says were deceptive and misleading sales tactics.

The commission cited sales of Allstar’s Magic Mesh Door as a case in point. A television commercial offered a two-for-one deal on the hands-free screen doors for $19.95. But it did not mention that the price includes a $7.95 shipping fee for each door, pushing the actual price to $35.85.

“Marketers must clearly disclose all costs. That includes processing fees, handling fees, and any other fees they think up,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, in a news release. “Working with the New York Attorney General, we’ll return millions of dollars to consumers that Allstar collected in undisclosed fees.”

In its own statement, Allstar said the company did not think its tactics were against the law.

“Allstar is pleased to have resolved this matter, and we’re proud that it resulted in positive change for our company. One of our goals has always been to provide a positive purchasing experience for our customers,” said Allstar attorney Jennifer De Marco.

“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.”

Under a settlement, Allstar will set up a $7.5 million fund to repay customers who got hit with hidden fees and pay $500,000 in penalties, court costs and other fees.

The FTC’s complaint also claimed Allstar customers who called to order their products were often misled by confusing language into ordering more products than they intended. Billing information was requested upfront, and if a customer asked for two of an item — such as with an advertised two-for-one deal — they received two “sets,” or four items total, at a price twice what they likely anticipated.

Allstar also attempted to upsell customers by using automated answering systems, according to the FTC. Sometimes, the only way a customer could decline approving an additional sale was to say nothing, the FTC charged.

Other Allstar products include Bumpits hair clips, the Side Sleeper Pro pillow, Eggies, the Perfect Bacon Bowl, the Chop Magic food processor and Cat’s Meow, a cat toy.

Consumers who think they may have been impacted by Allstar’s tactics may call the attorney general’s consumer help line at (800) 771-7755.

Doug Gross is a staff writer covering personal finance for NerdWallet. Follow him on Twitter @doug_gross and on Google+.