HARRISBURG – Attorney General Dave Sunday announced a settlement with America Mint, LLC, over the Mechanicsburg-based collectibles company’s “negative option features” and other business practices.
According to an Office of Attorney General investigation that involved more than 200 consumer complaints, it was determined that American Mint advertised collectibles and engaged in sales that resulted in consumers not realizing they were enrolled in subscription services — a practice referred to as a negative option feature.
Consumers then had short windows to return goods they were charged for as part of the subscription plan.
Under the settlement terms, American Mint agreed to pay $750,000 to harmed consumers, end subscription plans and collections efforts with nearly 200,000 customers, and revise its business and advertising practices.
“Negative option features are a breach of state consumer laws as they are deceptive practices designed to enroll consumers into future purchases,” Attorney General Sunday said. “This settlement will make many consumers whole while requiring the company to change its practices and refrain from negative option features. When buying any products, be sure to read the terms and conditions thoroughly before committing to that purchase.”
Any consumers who believe they may have been a victim of American Mint’s business practices are encouraged to contact the Bureau of Consumer Protection online, over the phone at 717-787-3391, or by emailing sc***@*************al.gov.
American Mint advertises and sells collectible merchandise, mostly collectible coins, via direct mail, over the phone, through print advertisements, and through the American Mint website.
The original lawsuit against American Mint alleged that the company was in violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law. The lawsuit alleged that American Mint used a “bait and hook” business strategy where they unfairly and deceptively lured consumers into believing that they are receiving collectibles for a reduced price or free, when in reality, these consumers were misled into a subscription plan where they were ultimately charged for the products if the consumers did not return them within the 20 day window.
By not clearly and conspicuously disclosing material terms and conditions of the subscription plan, failing to obtain consumers’ express and informed consent before signing consumers up for the subscription plan, and issuing confusing and misleading invoices to consumers, the Office of Attorney General alleges that American Mint engaged in misleading and deceptive business practices.
The lawsuit further alleged that American Mint’s deceptive practices included threatening consumers with their accounts being sent to collection agencies; taking payments from consumers, yet failing to deliver the products ordered; sending consumers unsolicited merchandise and invoices after consumers opted out of receiving additional items; failing to provide refunds per its own terms and conditions, and creating an unnecessary and undue burden on consumers who were trying to cancel their subscriptions.
The settlement agreement will allow for $750,000 to be paid by American Mint to impacted consumers and as costs. Furthermore, American Mint will no longer automatically enroll consumers in subscription plans without their explicit consent. As well, American Mint has agreed to end any and all collection efforts on more than 180,000 consumers’ accounts which were referred to debt collection agencies, and all outstanding consumer debt that was sent to collections will be discharged and consumers’ accounts will be cleared of outstanding charges.
This settlement, in the form of a Consent Petition for Final Decree, was filed in the Common Pleas Court of Cumberland County and entered as a Court Order. This case was handled by Senior Deputy Attorney General Merna Hoffman.
A settlement agreement shall not be considered as an admission of violation of the law.
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