Some junk mail is more than annoying

Junk mail more than annoying

By Bruce Mohl, Globe Staff, 10/12/2003

Unwanted junk mail pours into every consumer's home, but John M. Leonard of Hingham recently received a particularly annoying missive from a company calling itself TowPlus.

Most consumers probably would have thrown away the two-page letter, but Leonard read on. At the bottom of the first page he saw the words "cancellation required" and at the bottom of the second page he discovered that TowPlus was going to charge $95.40 to his credit card or checking account for a year's worth of emergency roadside service unless he promptly called to cancel.

Leonard did cancel but remained puzzled about who TowPlus was and how the company obtained his personal financial information without his permission.

"It just seemed so sleazy," Leonard said. "Part of me wanted to just grab them by the throat."

TowPlus's solicitation would appear to violate Federal Trade Commission rules against unfair and deceptive trade practices. The rules, as the FTC has defined them in a number of cases, bar companies from charging a customer's credit card for products or services without his or her consent.

In 2001, the commission reached a $9 million settlement with Florida-based Triad Discount Buying Service Inc. for engaging in practices strikingly similar to those used by TowPlus. Triad offered consumers who bought something from a telemarketing affiliate a 30-day "no obligation" free trial in its buying club. Unless the consumers called to cancel, they were charged a full year's membership without their knowledge or authorization.

"Companies must obtain a consumer's express informed consent to charge a credit card and cannot rely on the consumer's silence," said Reilly Dolan, assistant director for enforcement with the FTC.

Edgar Dworsky, editor of Consumerworld.org, said TowPlus's tactics are clearly deceptive. "If what they were doing were legal, people would be required to read all of their junk mail," he said.

What's also troubling about the TowPlus solicitation is how the company apparently acquired access to Leonard's credit card or checking account without his permission. In its letter to Leonard, TowPlus said he had recently purchased something from one of the firm's marketing partners and was receiving a 14-day risk-free trial offer of TowPlus as a "special way of saying thank you."

Leonard said he had no idea who TowPlus's marketing partner might be, and getting answers from TowPlus proved to be impossible.

TowPlus has a website and toll-free number where cancellations are processed, but it's impossible to talk to an actual human being. A second toll-free number for TowPlus instructs members to press one if they need roadside assistance, but the call is then disconnected.

Judging from its website domain address, the company appears to be located in Westminster, Colo., but refers inquiries to a post office box in Pompano Beach, Fla. The Boston Globe wrote to the post office box but heard nothing back. Directory assistance had no phone listings for a TowPlus in either Florida or Colorado.

The letter TowPlus sent to Leonard indicated the company serves more than 16 million people a year, but it actually has no customers. TowPlus hired Nation Safe Drivers of Deerfield Beach, Fla., to deliver its roadside assistance service. Nation Safe performs similar functions for dozens of other companies, including credit card and insurance firms.

John A. Moore, product director at Nation Safe Drivers, said the company had received a handful of calls complaining about TowPlus. He said TowPlus is new to the business and hasn't actually billed a single customer yet. He did not know how many employees it had.

"We just supply the benefits," Moore said. "We don't have any control over their marketing."

Moore passed along a statement issued by TowPlus's president, Henry Aragon, that didn't address any of the questions the Globe had raised. The statement called the company's roadside assistance package, which includes towing, flat tire, battery, lockout, and accident-theft services, a "tremendous value." Aragon also said the company guarantees "100 percent total satisfaction of our membership services."

The American Automobile Association, the nation's premier roadside assistance company, charges customers $45 for a one-year basic membership and $24 for an associate membership, plus a $14 initial enrollment fee to join. Even combining all the charges, AAA charges $12.40 less than TowPlus.

Moore said he was not allowed to release Aragon's home or business phone number and referred all questions to an attorney representing the company, who did not return phone calls. Calls to a Henry Aragon listed in Golden, Colo., were not returned.

Fixed doesn't mean fixed The dictionary defines fixed as meaning not movable, but credit card companies have their own definition for fixed-rate credit cards.

Frank, who asked that his last name not be used, said FleetBoston Financial recently hiked the interest rate on his fixed-rate Fleet titanium MasterCard from 7.9 percent to a variable rate of 13.89 percent. He complained about the dramatic change, got nowhere, and ultimately decided to take his business elsewhere.

Deborah Pulver, a Fleet spokeswoman, declined to discuss a specific customer's account. But she said the terms of fixed-rate cards are often changed if the customer defaults on his obligations or if he becomes unprofitable to serve.

"A fixed rate does not mean it's fixed for life," Pulver said. "A fixed rate means it's not tied to an index."

Frank, who said he has never made a payment late and pays off his balance every month, said he suspected he must have become unprofitable for Fleet.

Bruce Mohl can be reached at mohl@globe.com.