Car-dealer promoter sued over allegedly deceptive mailers

Hoosiers were lured by the chance for prizes such as a 70-inch high-definition television, $1,000 in cash or a vacation package, according to a lawsuit filed by the Indiana Attorney General Curtis Hill’s office. But what they actually received were low-value items like an MP3 player that had been purchased for $2.25, or a mail-in rebate coupon for $10 off the purchase of a turkey.

The complaint, State of Indiana v. Hopkins and Raines Inc., 55C01-1904-PL-000718, was filed April 4 in Morgan Circuit Court.

According to the court filing, Texas-based Hopkins and Raines, Inc., violated Indiana’s Deceptive Consumer Sales Act and Promotional Gifts and Contests Act by sending mailings that implied the recipients won a specific prize when, in fact, they had not. In additional to civil penalties, the state is seeking restitution of $500 for each person who received a mailing and attended the corresponding sales events.

Asked how much the total restitution would be, the Indiana Attorney General’s office could not provide a specific dollar amount.

“At this early stage of the case, the attorney general cannot state a firm number for the monetary amount of restitution he is seeking due to the millions of consumers potentially affected although Hopkins and Raines’ liability appears to be significant,” the office said in a statement. “The Attorney General’s specific monetary request will be made in future court filings or at trial after further discovery has occurred.”

This is the sixth lawsuit the Indiana Attorney General has filed in recent months against promotional firms over allegations of deceptive advertising. The other firms are DBR Integrity Promotions Inc., Dealer Direct Services Inc., Prophecy Marketing, Traffic Jam Events LLC and Xcel Media Group. To date, Indiana has obtained judgments against Traffic Jam Events and Prophecy Marketing.

Hopkins and Raines, according to the court filing, sent mailings to 2.14 million Hoosiers to promote sales events at numerous Indiana auto dealerships. The AG’s office said Morgan County had the highest number of mailings sent to residents, which is why the suit was filed there. The sponsoring dealerships each paid the company an upfront fee, averaging $16,059.55, to design and send the mailings, and to manage the corresponding sales event.

Recipients were told they were “winners” of significant prizes such as a pair of ATVs, a boat, $1,000, or a vehicle from the dealership, the lawsuit says. However, when consumers went to claim their treasures, they were subjected to sales pitches for vehicles and eventually informed they had not won the prizes represented in the mailings.

The company did not award a prize valued at more than $12, according to the complaint.

In some instances, recipients who were given a smart watch as their prize were required to pay $19.95 in taxes on the item even though it was only worth $11.63, the lawsuit says. In other instances, recipients were led to believe they had won one of the listed prizes, which on the mailing were prominently referenced with large color photos of $25,000 cash, a Honda ATV, 70-inch television or $1,000 cash. When they arrived at the sales event, they were awarded a mail-in rebate certificate for $10 off the purchase of a turkey.

Along with alleged deceptive nature of the mailing, the suit claims the mailings violated the Promotional Gifts and Contests Act. Specifically, the company is alleged to have uniformly failed to identify the name and address of the promoter; failed to state the odds of winning each prize in the appropriate place and size; failed to include any disclosure that the recipients may be subjected to a sales pitch; and failed to properly identify the retail value of the prizes.

“Always be skeptical of anything that seems too good to be true,” Hill said in a press release. “Typically, the announcement that ‘you’re a winner’ is merely a ploy to entice you to go listen to someone’s sales pitch. We want Hoosiers to be alert to all varieties of misleading advertising so they can avoid wasting their time or, even worse, getting talked into making ill-advised purchases.”

Anyone who believes they have been the victim of any type of same or attempted scam can contact the Indiana Attorney General’s office. To file a complaint, go to indianaconsumer.com or call 1-800-382-5516.