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On numerous occasions since April 1997, in the course of selling magazine subscriptions through "paid-during-service plans", defendants Prochnow, Gougion, and MOS failed to reveal in writing, with such conspicuousness and clarity as will likely to be read by the purchasers, the following terms of the subscription order:

• The name and the exact number of months of service of each publications [sic] covered by the contract;
• The total cost of each publication and all the publications covered by the contract;
• The downpayment or first payment required and the number, amount, and due dates of all subsequent installment payments, and the amount of any finance charges;
• The method of payment; and
• The purchaser's right to rescind or cancel the subscription order within three business days (or the actual number of days if defendants offer a cancellation period longer than three days) after date of receipt of the sales agreement by mailing a notice of cancellation to the seller's address or, if the seller uses a service company, to the service company's address, before the expiration of the cancellation period;

On numerous occasions since April 1997, defendants Prochnow, Gougion, and MOS failed to furnish to each consumer a final copy of the consumer's subscription contract, showing either the date mailed to the consumer or the date the consumer signed the contract, and the name of the seller with the seller's address and telephone number or, if the seller uses a service company, the address and telephone number of the service company, thereby violating Part I(m) of the FTC Order.

On numerous occasions since April 1997, defendants Prochnow, Gougion, and MOS failed to provide on a sheet separable from the written sales agreement a clearly understandable form which the purchaser may use as a notice of cancellation, thereby violating Part I(n) of the FTC Order.

On numerous occasions since April 1997, defendants Prochnow, Gougion, and MOS failed or refused a request to cancel a contract when the representation has been made that the contract will be cancelable, thereby violating Part I(f) of the FTC Order.

On numerous occasions since April 1997, defendants Prochnow, Gougion, and MOS failed or refused to cancel, at the subscriber's sole option, all of [sic] any portion of a subscription contract whenever any misrepresentation prohibited by the FTC Order has been made, thereby violating Part I(r) of the FTC Order.

On numerous occasions since April 1997, defendants Prochnow, Gougion, and MOS made references or statements as to the sum of money or duration or period of time in connection with a subscription contract or other purchase agreement which does not in fact provide, at the option of the purchasers, for the payment of the stated sum, at the stated interval, and over the stated duration or period of time, thereby violating Part I(g) of the FTC Order.

On numerous occasions since April 1997, defendants Prochnow, Gougion, and MOS assisted their telemarketers to mail thousands of post cards to consumers. There post cards state "We are going nuts looking for you" in an attempt to induce consumers to call the toll-free numbers listed on the post cards. The post cards do not disclose that the purpose of the contact is to sell magazines.

Defendants Prochnow, Gougion, and MOS thereby furnished or otherwise placed in the hands of others the means and instrumentalities by and through which the public may be misled or deceived in the maner or as to things prohibited by Part I(c) of FTC Order, thereby violating Part I(s) of the FTC Order.

On numerous occasions since April 1997, in connection with the sale or promotion of magazines by dealers, franchisees, licensees, employees, salespersons, agents, solicitors, independent contractors, or other representatives (who are not themselves respondents to the FTC Order), defendants Prochnow, Gougion, and MOS failed to institute and continue a program of continuing surveillance adequate to reveal whether the business operations of each such representatives conform to the requirements of the FTC Order, thereby violating Part II(F) of the FTC Order.

On numerous occasions since April 1997, in connection with the sale or promotion of magazines by dealers, franchisees, licensees, employees, salespersons, agents, solicitors, independent contractors, or other representatives (who are not themselves respondents to the FTC Order), defendants Prochnow, Gougion, and MOS failed to discontinue dealing with any representative who, as revealed by the program of surveillance set forth in Part II(F) of the FTC Order, continue the deceptive acts or practices prohibited by the FTC Order, thereby violating Part II(G) of the FTC Order.

In numerous instances since sometime in 1998, defendants Prochnow, Gourgion, MOS, and, since on or about January 28, 2000, all defendants, directly or acting through their representatives, in connection with their telemarketing of buying service memberships, failed to disclose, in a clear and conspicuous manner, before consumers pay for the buying service membership, all material restrictions, limitations or conditions to purchase, receive or use the goods or services that are the subject of the offers, including, but not limited to,

• That a consumer who fails to contact the buying service within a certain period of time to cancel the 30-day membership is automatically enrolled as a member in the buying service, and the consumer's credit card is charged an annual fee, and
• That a member's credit card is charged a renewal for each subsequent year unless the member cancels the membership.

In numerous instances since April 1997, in connection with their telemarketing of magazines, defendants Prochnow, Gourgion, MOS or their representatives, and, since on or about January 28, 2000, Altbach and Cross Media, or their representatives, have made false or misleading statements to consumers to pay for magazines, including but not limited to, when consumers try to cancel their purchase of magazines, misrepresenting that consumers cannot cancel their purchase of magazines, in violation of Section 310.3(a)(4) of the Telemarketing Sales Rule, 16 C.F.R. 310.3(a)(4).

In numerous instances since April 1997, in connection with the promotion, marketing, offering for sale, or distribution of magazines and buying service memberships, defendants Prochnow, Gougion, or MOS, or their representatives, and, since no later than on or about January 28, 2000, defendants Altbach and Cross Media, or their representatives, have represented, expressly or by implication, that they are collecting financial information, such as credit card numbers, to pay for the ordered magazines.

Defendants or their representatives have failed to disclose to consumers that the consumer's financial informatin is turned over to a third party that charges the consumer's credit card for a buying service membership. These facts would be material to consumers in their purchase of magazines.

In light of the representation set forth in paragraph 56, defendants' failure to disclose the material information set forth in paragraph 57 was, and is, a deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C. 45(a).

In numerous instances since April 1997, in connection with the promotion, marketing, offering for sale, or distribution of magazines and buying service memberships, defendants Prochnow, Gougion, or MOS, or their representatives, and, since on or about January 28, 2000, defendants Altbach and Cross Media, or their representatives, in connection with the promotion, marketing, offering for sale, sale, or distribution of magazines and buying service memberships, have represented, expressly or by implication, that consumers who agree to their offer will receive a "no obligation" 30-day membership in a buying service.

Defendants have failed to disclose adequately to consumers:

• That a consumer who fails to contact the buying service within a certain period of time to cancel the 30-day membership is automatically enrolled as a member of the buying service, and the consumer's credit card is charged an annual fee; and
• That a member's credit card is charged a renewal fee each subsequent year unless the member cancels the membership.

In light of the representation set forth in paragraph 59, defendants' failure to disclose adequately the material information set forth in paragraph 60 was, and is, a deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C. 45(a).

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