State gets OK to seek refunds for deceptive ads Marylanders lured to campsites in Pa. may benefit

April 10, 1992|By Norris P. West | Norris P. West,Staff Writer

ANNAPOLIS -- Score it a partial victory for Maryland residents who were lured to campsites in Pennsylvania and Virginia by deceptive direct-mail ads promising new cars and riches.

The Court of Special Appeals yesterday gave the Maryland attorney general's consumer protection division permission to seek refunds for most of the 43,000 Maryland residents who went to campsites owned by Outdoor World Corp. of Bushkill, Pa.

But the court refused to let the division seek refunds for people who paid as much as $9,000 to buy campsites from the company.

Outdoor World has mailed millions of brochures to Maryland residents over the years, enticing them to visit the sites by promising prizes that included $10,000 in cash and new automobiles. When people arrived, they were subjected to hours of slick sales pitches and then were told to pay a fee to collect less-valuable prizes.

Attorney General J. Joseph Curran Jr. argued before a three-judge panel of the court last month that the company had violated state law when it mailed the brochures here. He said the mailings were deceptive because they promised prizes without clearly saying that recipients had to pay "redemption fees" to claim them.

The court gave Mr. Curran permission to obtain refunds for expenses incurred by state residents to travel to Outdoor World sites. The judges, however, denied him authority to seek refunds for the 5,000 people who bought campsites.

Yesterday's decision could result in some $4 million in refunds.

The court, in an opinion written by Chief Judge Alan M. Wilner, said the authority sought by Mr. Curran was too broad.

"This record shows no evidence, or even the likelihood of evidence, that anyone from Maryland actually purchased a campsite membership in reliance on the offending notice," the decision said.

Mr. Curran said yesterday that he would decide later whether to appeal the case to the Court of Appeals in an effort to obtain greater authority to bring charges against out-of-state companies believed to be operating illegally in Maryland.

The consumer protection division had received more than 400 complaints about Outdoor World when it ordered the company to refund the fees in September 1990. That order was reversed by now-retired Baltimore Circuit Court Judge Joseph I. Pines, who ruled that the state did not have the authority to regulate agreements made outside Maryland.

Bedell A. Tippins, an attorney for Outdoor World, could not be reached at his office in Chicago for comment.

Mr. Curran said Outdoor World mailed nearly 6 million solicitations to state residents, indicating they had won such prizes as a BMW car, a color television set or $10,000. But the "winners" would have to travel to the campsites to pick up their prizes, the solicitations explained.

He said that once they arrived, they were required by company representatives to tour the campsites and were subjected to sales talks that lasted as long as nine hours.

Mr. Curran said that most people overlooked small print in the ads that listed the infinitesimal chances of winning the big prizes. More often, campsite visitors received certificates for less-valuable items -- and they had to send a $20 or $30 "redemption fee" to claim those.

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