Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Assets of operation sending unordered merchandise to nonprofits frozen, (Jul 31, 2014)

By Jody Coultas, J.D.

Based on a request by the FTC, the federal district court in Baltimore temporarily halted and frozen the assets of an operation that sent nonprofits, businesses, and municipalities overpriced light bulbs and cleaning supplies that they never ordered. The FTC seeks to permanently stop the challenged practices and to make the defendants return the alleged victims’ money (FTC v. v. Midway Industries Limited Liability Company, FTC File No. 132 3275, Civil Action No: 1:14-cv-02312-JFM).

The operation included a number of companies that purportedly misrepresented to organizations across the country that they had previously done business with them; that calls were to confirm a shipping or mailing address or follow up on a supposed previous order; that they were offering a free sample, catalog, or gift; or that they needed an employee’s name and contact information for some purpose other than a sale. The companies then sent consumers merchandise after misleading them and without consent.

The FTC charged the operation with violations of the FTC Act, the Telemarketing Sales Rule, and the Unordered Merchandise Statute.

Many of the organizations paid the invoices that accompanied the unordered merchandise, thinking the employee named on the invoice had placed the order. Those organizations became targets for future shipments of unordered merchandise. Organizations that questioned the invoices were often pressured into paying claiming that they had audio recordings verifying the order or stating they would accept a “discounted” price as payment in full.

Companies: Midway Industries Limited Liability Company

News: ConsumerProtection FederalTradeCommissionNews