New York AG Wins $16M in Magazine and Newspaper Subscription Scam

Judgment to cover restitution, penalties and legal costs

New York AG Wins $16M in Magazine and Newspaper Subscription Scam

Source: NY Attorney General

Last Thursday New York Attorney General Letitia James won more than $16 million in restitution, penalties and legal costs in a magazine and newspaper subscription scam lawsuit. James represented more than 68,000 New York residents who had been scammed by a network of New York and Oregon companies, some operating under the name Orbital Publishing Group, Inc., who fraudulently solicited magazine and newspaper subscriptions. The New York State Supreme Court ruled in favor of the plaintiffs and permanently barred the fraudulent network of companies from mailing unauthorized and deceptive subscription offers going forward.

Other companies and individuals in the lawsuit include Liberty Publishers Service, Inc.; Express Publishers Service, Inc.; Associated Publishers Network, Inc.; Adept Management, Inc.; Publishers Payment Processing, Inc.; Customer Access Services, Inc.; Consolidated Publishers Exchange, Inc.; Magazine Clearing Exchange, Inc.; Henry Cricket Group, LLC; and Lydia Pugsley of Adept Management, Inc. who served as a consultant for related companies.

The subscription to New Yorkers hard-earned money is cancelled for these deceptive magazine and newspaper companies, said Attorney General Jamesin a December 12 statement. This decision sends a message that, as the nations media headquarters, New York will not serve as a safe haven for those who aim to cheat, scam, and defraud our consumers. This is an important victory for the millions of New York consumers, who could of have been victims in the future.”

The New York attorney generals office filed the lawsuit in 2015, alleging the New York and Oregon-based companies had been defrauding customers for three years. Consumers received fraudulent magazine and newspaper offers that appeared to come directly from popular publications including The Washington Post, The Wall Street Journal, The New York Times, Consumer Reports, National Geographic, The New Yorker, Forbes, The Economist, Entertainment Weekly, Newsweek, Smithsonian, Time, The Nation and others. However, the publishers never authorized solicitation by the Orbital Publishing Group on their behalf. The publishers sent cease and desist letters, but the fraud network ignored their requests.

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Orbitals fraudulent subscription offers were based on supposedly deep discounts, but in actuality, they were charging more than double standard subscription rates and keeping the difference for themselves. The attorney generals office alleges that the publishing network failed to clearly, conspicuously, understandably and readably identify expiration dates on the offers, which is required by New York law, so subscribers renewed subscriptions that were still active.

This judgment is separate from an enforcement proceeding brought by the Federal Trade Commission who sued a publishing network in the U.S. District Court for the District of Oregon in 2016. Earlier this year, the Federal Trade Commission won an $8.9 million judgment against the publishing companies and three individuals who were also deemed liable. In that lawsuit, the fraud spanned at least five years and involved more than 375 newspapers across the country, including The Wall Street Journal, the Denver Post and The New York Times. The judgment was to be paid directly to the FTC who would then reimburse the consumers who were scammed.

Insider Take:

This win is great for the residents of New York who were scammed but bad, overall, for subscription companies who may be deemed guilty by association. Though the magazines and newspapers themselves were not named, the headline alone may cause some consumers to be cautious. In reality, they should be suspicious of any third-party solicitations. For subscription companies, we always recommend complete transparency – state pricing, terms and conditions, expiration dates and cancellation procedures clearly and conspicuously.

For consumers, we recommend that, if they doubt the legitimacy of any offer, they should go directly to the source for more information. If consumers have a subscription to The New York Times and they receive an offer by mail, they should go to their online account or call the customer service number listed on the website to check the subscriptions status and verify the validity of the offer.