National Association of Attorneys General Consumer Protection Report

May/June 1993

Attorney General Winston Bryant recently filed a lawsuit alleging violations of the state deceptive trade practices against G.C.S. Inc., a state buyer's club. According to the Attorney General, the club used direct mail, telemarketing, and fliers all promising free gifts to state consumers who would agree to listen to the club sales pitch. The high pressure sales pitch was allegedly replete with redundant deceptive promises concerning the advantages of membership in a buyer's club. In addition, may state consumers have paid for merchandise to be order through the club and have received neither the merchandise or the money. The Attorney General is seeking consumer restitution from the club's operators.

General Bryant also recently filed a lawsuit against Direct Access, Inc. and its principals and suppliers, for allegedly operating an illegal pyramid scheme. The product ostensibly sold by Direct Access is a membership in a consumer buying club and consumer information service. This organization operates in much the same fashion as Consumer's Buyline Inc. (CBI), according to the Attorney General.

The chancery court of Pulaski County, Arkansas, issued a temporary restraining order freezing the Arkansas bank accounts of Direct Access. Negotiations with the defendants have resulted in a tentative settlement. However, Consumer's Buyline has filed a Motion to Intervene in this lawsuit based upon its claim that the proposed settlement would adversely affect the competitive position of CBI in the marketplace. Please contact Assistant Attorney General James DePriest in General Bryant's office, (501) 682-2007, if your state has any experience with a situation where one targeted organization attempts to intervene in a state's lawsuit against a competitor.