A company that promised “buy one, get one free” deals to entice people to buy Snuggies on TV commercials is now paying out refunds to customers. And it's not because the full-length, wearable blankets were faulty.
The refunds are part of a settlement Allstar Marketing Group reached with the Federal Trade Commission, which accused the company of duping customers into paying more than they expected through hidden processing and handling fees.
The FTC is now mailing out 218,254 refund checks totaling more than $7.2 million to people who bought various “buy one get one free” products marketed by Allstar. The average check will be for about $33 and is funded from the money Allstar paid to the FTC.
But wait, there’s more! The settlement also compensates some customers of the Perfect Bacon Bowl, Magic Mesh Door, Perfect Brownie Pan, Cat’s Meow, and Roto Punch products.
“This agreement returns money to thousands of consumers in New York and across the nation who believed they were buying items at the price advertised on television, but ended up with extra merchandise and hidden fees they didn’t bargain for,” New York Attorney General Eric Schneiderman said in a statement.
“The settlement also brings much needed reforms to a major firm in the direct marketing industry. Those who use small print and hidden fees to inflate charges to unwitting consumers must be held accountable.”
The FTC complaint details that customers who thought they were getting two products for “just $19.95” also got stuck with a $7.95 processing and handling fee for each item. That meant their total for the two Snuggies, for example, would soar to $35.85. Customers were not allowed to order just one item under the promotion.
The FTC also said Allstar attempted to charge customers more by using automated answering systems that employed confusing tactics.
Consumers with questions about the refund may call 877-982-1294 to get more information. The New York Attorney General’s consumer helpline, 800-771-7755, is also taking calls about the case.