By Martha Kessler

Feb. 2 — An Indiana-based direct mail company has agreed to pay Vermont $90,000 to settle allegations that it violated state and federal law when it sent out mailings asking for personal information without disclosing how that information would be used, the state attorney general's office announced Jan. 29 (In re Main Street Power Mail Inc., Vt. Super. Ct., No. 56-1-15WNCV, assurance of discontinuance filed 1/26/15).

Under the terms of a no-fault assurance of discontinuance filed Jan. 26 in Vermont Superior Court, Main Street Power Mail Inc. of Sheridan, Ind., will also be required to clearly disclose the purpose of its mailings in the future, according to a Jan. 29 statement by Vermont Attorney General William Sorrell (D).

“We will not tolerate businesses using deception to obtain consumers' private information,” Sorrell said in announcing the court filing.

980 Vermonters Respond to Mailings

According to the assurance of discontinuance, between March 2012 and March 2013 Main Street Power Mail mailed over 30,000 copies of a solicitation to Vermont citizens offering to provide them with information, free of charge, on a life insurance product. The mailing asked the recipient to fill out and return a card containing personal data, including the person's age and the name and age of his or her spouse.

Over 980 Vermonters responded to the mailing, according to the settlement document.

“Despite the mailing's clear message that its purpose was to provide free information to consumers, the real purpose was to persuade consumers to respond with personal data for use in creating leads for insurance agents,” the state said in the settlement document.

“The real purpose was nowhere stated or implied in the mailing,” the state alleged.

Sorrell's office alleged that the failure to disclose that responses from consumers would be followed up with contact by a salesperson is an unfair trade practice under the Vermont Consumer Protection Act, 9 Vt. Stat. Ann. § 2453(a).

Barred From Contacting Vermont Consumers

The agreement requires Main Street Power Mail and its owner to make a first payment of $30,000 followed by six equal payments of $10,000. The assurance of discontinuance said the payments were staggered in light of the fact that the company's building burned to the ground in 2014.

In addition, the company is barred from contacting any Vermont consumer, by mail or other means, for the purpose of generating business leads without “clearly and conspicuously” disclosing the fact that if a consumer responds, he or she may be solicited to purchase a product.

Main Street Power Mail's attorney, Kimberly B. Cheney of the Barr Law Group in Stowe, Vt., didn't immediately respond to Bloomberg BNA's Feb. 2 request for comment.

In October 2014, Texas-based Lead Concepts Inc. agreed to pay $90,000 to settle similar allegations brought by the attorney general (206 PRA, 10/24/14).

To contact the reporter on this story: Martha Kessler in Boston at mkessler@bna.com

To contact the editor responsible for this story: Katie W. Johnson at kjohnson@bna.com