Facebook Twitter

FTC CLOSES THE BOOK ON TELEMARKETER, PUBLICATIONS

SHARE FTC CLOSES THE BOOK ON TELEMARKETER, PUBLICATIONS

A national telemarketing operation that investigators say made exaggerated claims to sell guides for used cars and jobs has been shut down by the Federal Trade Commission.

U.S. District Court records show that under a settlement with the regulatory agency, Jay Peterson and his entities - U.S. Hotline, Ads Across America and Tel-Source - must pay more than $626,000 in federal and Utah taxes and another $168,000 to bankruptcy creditors.This week, $49 refund forms were to be mailed to 375,000 ex-subscribers of Peterson's publications, which contained such offers as stylish cars for $100 at government auctions and $40,000-a-year jobs reading books at home.

Still, Peterson's attorney, Charles Abbott, said the deal ending a 1993 lawsuit was "the most favorable settlement that any defendant has ever received in a (false-representation) case.

"Absolutely . . . a significant portion of what they seized will come back to him," the lawyer said.

A court-appointed receiver is holding about $5.2 million in cash and property seized from Peterson in 1993 after the FTC filed suit in Utah federal court.

Under the settlement, the estate will fund such liabilities as:

- $626,000 for federal and state taxes and $168,000 for creditors.

- Lawyers and accountants fees for administering the seized assets. Ray, Quinney and Nebeker, the Salt Lake law firm appointed as receiver, has been paid more than $310,000. Accountants at Foote Passey Griffin & Co. have earned more than $200,000. Peterson's lawyer, Abbott, and his corporations' attorneys at Prince Yeates and Geldzahler also have been paid from Peterson's frozen assets.

- The consumer refunds.

Abbott said Peterson may be returned at least half of his assets if, as his client reportedly expects, most ex-customers will not apply for the refund because they have no complaints with the publications.

FTC attorney Catherine Fuller, however, insists there are "boxes and boxes of complaint letters."

"I expect that most people who get the (refund offer) would respond because they would want their money back," she said.

Historically, the FTC gets 30-35 percent response rates to such mass refund offers, Fuller said.

Fuller predicts at least 20 percent of Peterson's former customers will seek refunds.

However, if Abbott is right and Peterson is returned a substantial sum, Peterson still could face a new round of taxes through loss of his IRS deduction for the expenses of the refund claims.

The final tallying of Peterson's seized estate will not occur until early 1996, when the refund program expires.