Office of the Attorney General News Release ArchiveWednesday, August 30, 2000
CORNYN OBTAINS COURT ORDER AGAINST DECEPTIVE BUYER'S CLUB
AUSTIN - Texas Attorney General John Cornyn today obtained a final judgment and permanent injunction against Asif Shamsi, the owner of the Professional Savings Network of Texas, Inc. (PSN). PSN lured consumers with deceptive advertising and sold "memberships" into a buying club for $800 to $1,695 promising steep discounts off retail items. Consumers rarely, if ever, saw these discounts.
"Consumers deserve honest, up-front information from businesses. Deceptive practices, especially those involving bogus prize giveaways, will not be tolerated in Texas," said Attorney General John Cornyn.
The suit alleged that PSN misrepresented the true nature of any discounts the consumer would receive on retail items such as furniture and electronics by being a member of PSN's buyer's club. After consumers purchased the membership and attempted to use it, they learned that representations during the initial solicitation were false, and that the savings, if any, were far less than represented.
The Attorney General's office has received 30 complaints on PSN from consumers throughout Texas. Consumers complained that many of the items they sought to buy from PSN were obtainable at local retail stores at the same or lower prices than offered at PSN. The State's investigation revealed that PSN actually purchased some electronic equipment ordered by consumers at local retail stores such as Best Buy and Circuit City--instead of purchasing the products directly from the manufacturer as represented to consumers.
PSN also engaged in deceptive advertising by distributing "scratch off lotto cards" and post cards showing that consumers had won a valuable "prize." Consumers were told to then call PSN to receive their prize. Once they were on the phone, a PSN representative then told them to come to the store for a brief tour in order to redeem their prize. The brief tour was, in fact, a lengthy sales presentation focusing upon memberships in the buyer's club for $800 to $1,695. The actual prize awarded was always a "vacation certificate" of little or no value.
The State's suit focused on the method used by PSN to solicit consumers to visit their business. The State alleged that the deceptive use of the "scratch off lotto cards" and the prize notifications as well as the deceptive nature of the club membership were violations of the law.
The formerly Houston-based company went out of business in December of 1999. Attorney General Cornyn sued PSN and Asif Shamsi for violations of the Texas Contest and Gift Giveaway Act, the Texas Deceptive Trade Practices Act and other consumer protection statutes. The final judgment was filed in the 280th District Court of Harris County, and requires that PSN and Shamsi pay the State the sum of $43,000 in attorney fees and restitution for consumers. If consumers feel they are due restitution, they should call the Attorney General's consumer protection hotline at 1-800-252-8011. The judgment also contained a permanent injunction against PSN which prohibits PSN from engaging in deceptive practices in the future. The case was handled by Assistant Attorney General John Owens in the Houston Consumer Protection office.
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Contact Mark Heckmann, Heather Browne, or Tom Kelley at (512) 463-2050
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