BEVERLY — ITV Ventures has laid off the majority of its remaining employees and stopped selling infomercial merchandise, according to two people who used to sell products through the company.
Tracy Austin, who up until Wednesday morning sold the infomercial products as an independent business owner from her home in Greenfield, said the company has informed her it's opening a new venture called Elite Virtual Systems Group.
She said EVS, which launches Oct. 10, will be run by Donald Barrett, who owns ITV Ventures.
Barrett also owns ITV Direct Inc. and Direct Marketing Concepts, both of which were sued by the Federal Trade Commission in 2004 for airing deceptive informercials.
It's unclear exactly how EVS will operate.
"It's one of those things that's still up in the air," Austin said. "There's a lot of gray areas and confusion still. They're only giving us enough information to see if we want to move forward. They're not giving us the nuts and bolts of why it fell apart."
Company officials declined to comment.
Problems came to light when the Federal Trade Commission filed a lawsuit alleging ITV aired deceptive and misleading informercials. The ads touted two products — Coral Calcium and Supreme Greens with MSM — and included claims that the products cured cancer, heart disease, diabetes and Parkinson's disease, and that they helped people lose weight.
After a federal judge ruled in July that Barrett and the companies were responsible for airing deceptive informercials, ITV Ventures began laying off employees. About 56 workers lost their jobs in August, and another 35 at the end of September.
It's unclear how many people were laid off this time around, but ITV Ventures attorney Michael Sciucco said after the September layoffs there were about 120 employees left. A couple of years ago, the company employed more than 400.
The company, he said in September, was restructuring and going through a transition.
The headquarters at 55 Cherry Hill Drive were quiet but open yesterday, with one receptionist at the front desk. She referred all questions to the legal counsel — Sciucco. Attempts to reach Sciucco Wednesday and yesterday were unsuccessful.
Yet both Austin and John Fiore, another independent business owner who resigned in November 2007, said some of the employees will stay on to be a part of EVS, and that Barrett announced he plans to hire managers from Fortune 500 companies to run the business.
The FTC lawsuit also alleged ITV and Direct Marketing made unauthorized credit card charges to customers' accounts. Heather Hippsley, assistant director for the division of advertising practices for the FTC, said the companies enrolled customers in an auto-ship program without their consent, sending them monthly products and automatically charging their credit cards.
That issue goes to trial on Oct. 27. At that time, a judge is also expected to determine how much restitution Barrett's company has to pay the FTC for airing the misleading ads.
"We're seeking $55 million, because collectively, that is the FTC's view of how much consumers spent purchasing the two products, and on the auto-ship," Hippsley said.
The money would be used to refund customers.
"If the FTC prevails, typically we get the customer list from the company, and offer restitution back to the consumers," she said.
The FTC is also seeking a permanent injunction that would prohibit Barrett from making false claims, and would require that customers clearly understand any services they sign up for.
The injunction would apply to any future businesses under Barrett, such as EVS Group.