DATE: Tuesday, September 9, 1997            TAG: 9709090266

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   50 lines

BEACH TELEMARKETER AGREES TO PAY FINES IT NEVER INTENDED TO VIOLATE FEDERAL LAWS, APEX MARKETING GROUP SAID IN A STATEMENT MONDAY.

A Virginia Beach telemarketer has been fined nearly $90,000 for allegedly defrauding customers who purchased its magazine subscriptions, according to court documents.

In May, the Federal Trade Commission raided the offices of Apex Marketing Group, located off South Independence Boulevard. The agency also filed suit in U.S. District Court in Norfolk, claiming the telemarketer had bilked thousands of consumers since 1988.

Apex officials, who accused the FTC of acting ``heavy-handedly,'' said Monday that they agreed to the fines as part of a settlement with the agency. But the company, in a statement, said it never intended to violate federal laws.

``Apex and (company president Thomas) Johnson deny vigorously that any improprieties intentionally occurred,'' the company said in the statement. ``Any improprieties which occurred were the result of innocent mistake or inadvertence by Apex's dedicated conscientious sales representatives.''

In the civil suit, federal regulators said Apex's employees, in cold calls to customers, falsely told people they had won cash, airline tickets or other prizes.

Company representatives told customers that Apex would sue to collect its money, even though it did not intend to do so, the suit said. In addition, Apex mailed customers ``warrant in debt'' forms that were never issued by the clerk of the Virginia Beach General District Court, the FTC said.

Apex could have been fined $750,000, according to a Aug. 25 judgment filed in federal court. But much of that will be waived if the company remains on good behavior and honors other FTC directives.

The final fine of $88,731 will be paid by Apex and Johnson. The defendants also may pay attorneys' fees, which total about $70,000, Johnson said.

The FTC, however, didn't limit its punishment to a monetary fine. It has ordered Apex to provide copies of the court order to all employees, company officers and independent contractors.

The telemarketer also must mail letters to some customers, offering them a chance to cancel. This order affects buyers from 1992 to late August who requested cancellations and those who were sent phony debt warrants, among others.

Apex, also known as Atlantic Service Corp. and S.J.A. Society Inc., wasn't the only magazine telemarketer targeted. In May, the FTC also filed suits against similar businesses in New Jersey and California. State officials, as part of the same sweep, targeted companies in Pennsylvania, New York and Minnesota.

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