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News briefs from Directmag.com - Brief Article

Aug. 7, 2002

Jennifer Lin, vice president of marketing information and research at Paradysz Matera & Co., died of cancer at age 42. Lin joined the list brokerage firm in 1996 after stints at Time, Reader's Digest and Boardroom. She spearheaded creation of the firm's MarketRelevance promotion tracking database, seasonality studies and industry benchmarking tools.

The U.S. Postal Service's Board of Governors joined the growing number of organizations calling for a presidentially appointed commission to oversee postal service reform. In a statement signed by chairman Robert F. Ryder, postal governors said they "support all efforts for appropriate [postal] reform, including a commission of distinguished citizens to review all aspects of the postal system and recommend changes that ensure affordable, universal service is maintained in the future."

Aug. 6

A sweeping crackdown on investment fraud and bloated boiler-room commissions was begun by the Securities and Exchange Commission. The SEC filed four lawsuits, accusing 81 defendants of selling unregistered securities and paying exorbitant commissions to telemarketers. Together the defendants raised $30 million in five years, according to the SEC. The defendants included Heritage Film Group, which purported to develop motion pictures; Ephone Inc., which said it was formed to provide long-distance service through the Internet; and Intracom Corp., a seller of software and Internet solutions to medical professionals.

Alloy Inc. said it will acquire the assets of Youthstream Media Networks Inc. for $7 million. The assets include Youthstream's media properties, including 20,000 display media boards on high school and college campuses. Alloy is a marketing services company focused on Generation Y.

The Reader's Digest Association Inc. named Dawn Zier as vice president and circulation director for flagship publication Reader's Digest. Zier had previously been vice president of circulation marketing.

Aug. 5

Minnesota Attorney General Mike Hatch said he is investigating whether Fingerhut Cos. Inc. improperly imposed late fees on customers after changing installment payments to a revolving credit plan. Hatch is also questioning whether Federated Department Stores gave customers proper notice that they could incur late fees.

Aug. 2

Two telemarketers who allegedly sold fraudulent advance-fee loans agreed to pay $3 million to settle federal and state lawsuits against them. The defendants, Robert J. Demellweek and David Vincent Jensen, also submitted to a lifetime ban preventing them from telemarketing credit-related products or services. They ran the now-defunct American Savings Discount Club.

Aug. 1

The Massachusetts Senate passed a bill authorizing the creation of a telemarketing do-not-call list. The bill, approved by the state's House of Representatives in July, would allow consumers to sign up for a do-not-call list without charge. The measure exempts nonprofits and companies that have a prior relationship with the consumer. Gov. Jane Swift was expected to sign the bill, which is to take effect Jan. 2, 2003.

Lillian Vernon Corp. signed an agreement with Metris Cos. to launch a co-branded credit card. Premiering next month, the Lillian Vernon MasterCard will feature a loyalty program allowing card members to earn gift certificates and other benefits.

July 31

A federal court ordered the operators of an opportunity scam to pay $16.5 million in consumer redress, according to the Federal Trade Commission. However, a receiver appointed by the court in March 2001 has yet to determine how much money will be available for consumers. The defendants, Medicor LLC, Andrew Rubin and Matthew Rubin, sold bogus work-at-home medical billing opportunities by telephone to more than 40,000 people between 1999 and 2002, the FTC alleged. The cost to the victims was $375 apiece.

July 30

Harry V. Quadracci, founder and CEO of Quad Graphics, was found dead in a lake near his home in Chenequa, WI. The cause of death was accidental drowning. He was 66. Quadracci's brother and Quad Graphics co-founder, Tom, took on the role of CEO. Earlier in the month, a fire caused the collapse of the firm's 10-story paper and product storage building in Lomira, WI.

A federal appeals court ruled that TransUnion cannot sell lists based on personal data derived from consumer credit reports. In upholding a lower court's decision, a three-judge panel of the U.S. Appeals Court for the District of Columbia District Court supported the Federal Trade Commission's contention that such information is private under the Fair Credit Reporting Act.

July 29

IVillage Inc. said it plans to eliminate pop-up advertisements on its network of Web sites by the end of the third quarter. The decision was based on a survey showing that 92.5% of iVillage visitors found pop-up advertising the most frustrating feature of the Web.

After a lengthy review, Reed Exhibitions has whittled down the number of advertising and design agencies that market its conferences from more than 12 to four. The firms are CPS Direct Inc., Snyder Communications, Outthink and I2i. The business is worth roughly $10 million in total billings.

July 26

Kentucky Attorney General Ben Chandler filed his first lawsuit over alleged violations of the state's new do-not-call law. The defendants include Simplified Data Solutions, of Largo, FL, and Sound Media Group, of Irvine, CA. The suit alleges that employees of the firms, some of whom used fictitious names, called at least 100 people on the do-not-call list to promote a debt consolidation service.

July 25

The House of Representatives passed a $34.2 billion bill allocating just a shade over $60 million for the U.S. Postal Service. The postal service allotment is significantly less than the $107.6 million the House Appropriations Committee recommended, and $36 million less than the USPS received last year.

Online sales rose 12.1% last year to $31.4 million, according to a report from the Direct Marketing Association. The study, conducted by Wharton Economic Forecasting Associates, forecast that online sales will top $36 billion this year, and grow by 20.9% a year to total $81.1 billion.

July 24

Postmaster General Jack Potter abolished a controversial bonus program for about 80,000 U.S. Postal Service executives, supervisors and managers. The program came under fire from several U.S. Senators last year when it was revealed that the USPS was prepared to pay out $280 million in bonuses.