Published: 02-22-08
HCI Direct to pay $455000 will make refunds to wronged customers
AUSTIN – Texas Attorney General Greg Abbott has reached a $455000 settlement agreement that resolves an enforcement action involving a direct marketer of women’s hosiery products and other merchandise known as HCI Direct Inc. The Pennsylvania-based company must provide restitution to consumers who filed complaints about its business practices.
Doing business as Silkies HCI Direct violated state consumer protection laws by offering prospective purchasers a free sample of its merchandise including hosiery. After consumers responded to direct mail solicitations they were automatically enrolled in the company’s “continuity sales plan” without their knowledge. Thereafter if consumers did not cancel the plan the company would immediately follow up with more shipments the purchaser did not request. HCI Direct then billed consumers for the unrequested merchandise.
The Attorney General investigated HCI Direct for failing to clearly disclose all terms and conditions of this sales plan including the future shipment and billing aspects of the plan a violation of the Texas Deceptive Trade Practices Act. Under today’s agreement the company must obtain consumers’ approval before offering “free” products and before enrolling them in the continuity plan. HCI must also include in its direct mailings a toll-free number mailing address and Website for consumers who wish to cancel the plan.
Under today’s agreement HCI Direct has agreed to a broad restitution plan which requires the company to provide full refunds to eligible consumers who file complaints with the Office of the Attorney General.
