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Mantra Nailed Over Alleged Improprieties

Mantra Nailed Over Alleged Improprieties
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Jul 31, 2004 10:30 AM PDT    Text size: 
SANTA MONICA, Calif. — Mantra Films Inc. has agreed to pay nearly $1.1 million to settle government claims that the company shipped unordered products and then charged customers.

The settlement with the Federal Trade Commission, announced late Friday, returns more than $548,000 to people who received "Girls Gone Wild" videos or DVDs and returned them but did not get a refund.

Regulators alleged that Mantra enrolled customers who responded to Internet and TV advertising for a single video or DVD in a "continuity" program.

Once consumers were enrolled in Mantra’s program, they received additional, unordered videos, and weren't given an effective means to cancel the program, the FTC said.

The FTC also alleges that consumers' checking accounts were debited without their consent.

The deal with the government requires Mantra to get customers' consent before billing them for products. The Santa Monica, Calif.-based company also must clearly disclose terms of its membership in its "continuity" programs.

It is not the first time the company or its founder, Joe Francis, has faced legal problems. Mantra and Francis both have been target of numerous suits, including right to privacy claims and rape charges.

But the company continues to steamroll and expand its brand. Mantra this month launched its second film series, “Guys Gone Wild.”

And in April, Mantra signed a deal with Titan Bar Concepts to launch Girls Gone Wild Cantina and Dance Club in Las Vegas, New York, New Orleans and Miami.

Titan is injecting $30 million into the new Hooters-like restaurants scheduled to open in either late summer or early fall that will feature dance routines by waitresses and bartenders, as well as big screens for watching sports.

The company also made a deal with MGM to purchase the rights to use the “Girls Gone Wild” videos as the theme of either a teen comedy or a reality movie, and Jive Records is planning to release a compilation CD of dance music under the “Girls Gone Wild” brand.

Mantra also is entering the fashion apparel business, with a full line to be sold in “cool, hip, young” stores like Urban Outfitters.

Francis, the 32-year-old creator of the “Girls Gone Wild” videos, has built Mantra into a reported $100 million company. The company’s direct-to-consumer video series “Girls Gone Wild” released 83 different titles and sold 4.5 million videos and DVDs in 2002, when last reported.

Francis got started on his production career after graduating USC, marketing such videos as “Banned From Television,” which featured TV bloopers and gaffes. That year, in 1997, he made $10 million from the show.

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