BEVERLY — Marketing firm ITV Ventures has laid off 56 employees, just weeks after a federal judge ruled that the company aired deceptive infomercials and must pay restitution.
The Federal Trade Commission is seeking up to $55 million in restitution to customers for infomercials touting products that the company claimed would cure cancer, heart disease, diabetes and other ailments.
ITV's lawyer, Michael Sciucco, said there could be more layoffs in the future.
"That is definitely a possibility," Sciucco said. "We're going through a difficult financial time with the economy and recent government intervention."
Sciucco said ITV has been active in the community and has employed local citizens for years. At one point, the company had more than 400 workers, but numbers are now under 200. The headquarters are at 55 Cherry Hill Drive.
Despite rumors, he said there are no plans to close, or file for bankruptcy.
"We're going to continue to operate the business and pull through this," he said.
Linnea Walsh, communications director for the Executive Office of Labor and Workforce Investment, said the employees were sent home on Friday, with no notice.
"We've worked to reach out to the company," Walsh said. The federal agency's rapid response team provides training and assistance to employees during major layoffs.
"Our concern is helping them to connect to other possible job opportunities," she said.
Sciucco said it was a difficult decision to lay off workers, but the company is re-evaluating and restructuring its business. People are less likely to pick up the phone and order something on TV when they're worried about filling up their gas tank, he said. Plus, ITV has spent "millions of dollars in legal fees" over the past four years, he said.
Frank Dorman, a public affairs specialist at the Federal Trade Commission, said he wouldn't be surprised if ITV filed for bankruptcy, but it wouldn't affect their lawsuit.
"Whether or not they have resources for a court to go after doesn't change that they violated a law," he said. The FTC plans to pursue the case, including the $55 million.
The FTC sued ITV over two infomercials that aired in 2004. The advertisements were for products called Coral Calcium and Supreme Greens with MSM and included claims that the products cure cancer, heart disease, diabetes and Parkinson's disease and that they helped people lose weight. Last month, U.S. District Court Judge George O'Toole ruled those claims were unsubstantiated.
When ITV was forced to pull the ads in 2004, company head Donald Barrett filed a countersuit, saying his right to free speech was being infringed by federal regulators, and ITV has been "defending those cases vigorously," Sciucco said. O'Toole also dismissed that suit in his ruling.
ITV is under the umbrella company Direct Marketing Concepts, which has a poor reputation.
"It is our No. 1 most-complained-about business," said Paula Fleming, vice president of communications and marketing for the Better Business Bureau. About 90,000 businesses in Massachusetts, Vermont, Maine and Rhode Island are registered with the organization.
The Better Business Bureau rates Direct Marketing Concepts as "unsatisfactory ... due to eight unresolved complaints and its failure to substantiate or modify advertising claims," according to the Web site.
The Better Business Bureau has received 1,570 complaints about the company in the last three years.
While most of them were resolved, 679 involved credit, billing or collection issues; 469 involved unauthorized credit card charges; 249 involved delivery issues; 199 involved the nondelivery of products; and 122 involved customer service issues.
In December 2005, Direct Marketing Concepts wrote a letter to the Better Business Bureau when asked to substantiate advertising claims.
It read, in part, "Our unparalleled track record of performance is just the beginning. We deliver the highest conversion rates in the industry — every time. ITV maintains the highest levels of integrity, honesty and professional business ethics."
