Settlement Orders Consumers Repaid -- `Learning Machine' Makers Are Told They Must Make Refunds, Pay Legal Costs

REDMOND - They called it the Learning Machine, and the ads promised wonders: Speak a foreign language. Lose weight. Improve your memory.

But for 240 people from 36 states and Mexico, the promises - and refund checks - went undelivered.

To settle a lawsuit filed in December by state Attorney General Christine Gregoire and jurisdictions in four other states, the machine's manufacturer, Zygon International Inc. of Redmond, agreed this week to pay $320,000 in refunds and legal costs.

Dane Spotts, Zygon owner and president, signed consent decrees with Gregoire and the attorneys general of Pennsylvania, Texas and Illinois, the district attorney of Napa County, Calif., and the Federal Trade Commission.

The lawsuit was filed in King County Superior Court after consumers complained they did not receive refunds. State Assistant Attorney General David Horn said most of the complaints, including 22 from Washington residents, involved returned machines that did not work, or had broken or missing parts.

"The machine, which is basically a CD player with goggles, is not inherently harmful," he said. "But the suit was filed because of the false advertising and the fact they were not following their refund policy."

Zygon officials could not be reached for comment. The company's phone has been disconnected, and Zygon's attorney said she was not authorized to comment on the settlement.

The Learning Machine, a compact-disc player and headset, was said to enhance one's ability to learn through "a unique combination of light and sound that stimulates the mind to match the wave frequency of the program." Ads also claimed the machine could be used as a "virtual-fantasy computer."

Zygon advertised the machine in nationally distributed catalogs, as well as on television, radio and the Internet. It sold for about $300. Compact discs for the various programs were sold separately.

About $195,000 of the settlement will be set aside for customer refunds.

Zygon customers who have not received a refund for returned merchandise can call 1-800-320-9105 or write to: Zygon Refund Center, c/o Gillardi & Co., P.O. Box 8060, San Rafael, CA 94912-8060 by July 1.