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Oct. 23 — A marketing company that allegedly sent Vermont consumers thousands of mailings requesting their personal information to generate leads for insurance agents but without explaining how the information would be used has agreed to pay $90,000 to settle charges by the Vermont Office of the Attorney General, the office announced Oct. 20.
The settlement with Lead Concepts Inc. demonstrates the commitment of Vermont Attorney General William Sorrell (D) “to ensuring that personal information is not obtained for commercial reasons from seniors and other Vermonters without their informed consent,” the office said in an Oct. 20 statement.
“Privacy is a core value in Vermont, and I will vigorously enforce the law to protect it,” Sorrell said in the statement.
Lead Concepts, based in Grapevine, Texas, “generates business leads for insurance agents by sending direct mailings to consumers that request them to return a responsive postcard containing their name and age, spouse's name and age, and other information, which is then furnished to the agents to use in contacting the consumers to offer to sell them insurance policies,” according to the assurance of discontinuance.
The company sent thousands of such mailings to Vermont consumers between 2010 and 2013, including some to elderly consumers, the Office of the Attorney General said.
Although some of the mailings clearly disclosed their purpose—to obtain consumer information to generate marketing leads—42,000 of the mailings to Vermont consumers didn't disclose that purpose, the office said. Approximately 420 Vermonters returned the postcard with their information to Lead Concepts.
The Office of the Attorney General alleged that the failure to disclose that a salesperson would follow up on responses to the commercial mailings constitutes an unfair trade practice under the Vermont Consumer Protection Act, Vt. Stat. Ann. tit. 9, § 2453(a).
Lead Concepts denies that it violated state or federal law, the office said.
The assurance of discontinuance, filed Oct. 15 in the Vermont Superior Court, requires Lead Concepts to pay $85,000 to the state of Vermont.
In addition, the company has agreed to pay $5,000 to Vermont Adult Protective Services, a state agency that aims to protects vulnerable adults from neglect, abuse and exploitation. The purpose of this payment is to “underwrite the cost of training and maintaining a network of anti-fraud advocates for senior citizens in Vermont,” according to the Office of the Attorney General's statement.
Lead Concepts also cannot contact Vermont consumers for the purpose “of generating business leads without clearly and conspicuously disclosing the fact that if the consumer responds to the contact, he or she may be solicited to purchase a described product or service,” according to the assurance of discontinuance.
The Vermont Office of the Attorney General represented the state. Tarrant, Gillies & Richardson represented Lead Concepts.
The assurance of discontinuance is available at http://ago.vermont.gov/assets/files/Consumer/Lead%20Concepts%20AOD%20filed%2010-15-14.pdf.
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