The Internet Order company, known for its product “The Pimsleur Approach” language software sold online, has agreed to pay a one million dollar fine to settle charges by the Washington Attorney General who alleges the company violated consumer protection laws by engaging in what is referred to as a Negative Option Trap.
Negative option billing, is the business practice of automatically billing a consenting consumer for products or services of which the consumer must pay or cancel in advance of delivery. Washington State law treats deceptive Negative Option Billing as a violation of the consumer protection act and also considers unsolicited goods delivered to a consumer to be gifts and the recipient has no obligation to pay.
The investigation began after an advertisement program offering to sell consumers a language instructional CDs for the introductory price of $9.95. Consumers complained that afterward they were unexpectedly billed for additional language CDs every sixty days for in some cases reportedly $64.00 each.
The Washington Department of Health Medical Quality Assurance Commission issued an ex parte order of summary action, suspending the medical license of a Gig Harbor, Washington psychiatrist following his arrest for allegedly making death threats and threats to bomb the Molina Health Care’s facility in Bothell. The summary suspension was sought by the Attorney General’s Office and granted three days after his arrest. It will be effective pending further action.
Police allege Dr. Said Farzad M.D. threatened employees of insurance provider Molina Health Care. In a series of phone calls in April and May, Farzad complained about paperwork problems associated with his patients, and then began threatening to shoot employees. He was arrested by Bothell police the following day.