Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Commission wins temporary halt of alleged office supply scam, (Dec 29, 2015)
Organizations Mentioned:Liberty Supply Co. | Nor-Jay Enterprises, Inc.
By Jody Coultas, J.D.
The federal district court in Sherman, Texas, temporarily halted and froze the assets of an operation that allegedly scammed millions of dollars from nonprofit organizations and small businesses through an office supply scam, according to a press release issued by the FTC. The court entered a temporary restraining order against the defendants, which was extended pending the court’s determination on the scope and relief required in its preliminary injunction (FTC v. Liberty Supply Co, File No. X160008, Dkt. 4:15-cv-00829-ALM).
Individuals from Liberty Supply Co., also doing business as Omni Services, sold office supplies to churches, schools, and businesses. The complaint alleged that Liberty Supply quoted a per-unit price, but only sold multi-unit quantities. This caused consumers to believe the quoted price applied to a package of items, instead of an individual item. The defendants also failed to disclose the final price, quantity, and shipping costs, according to the complaint. The defendants’ actions allegedly violated the FTC Act, the Telemarketing Sales Rule, and the Unordered Merchandise Statute.
The complaint also alleged that the defendants aggressively sought payment for unordered merchandise. When consumers paid the full amount, the defendants called to thank them, and then offered and sent a free gift, along with more unordered merchandise and an invoice for it, according to the complaint. When consumers questioned the invoices, the defendants allegedly said they had a transcript of the call, but refused to produce the transcript.
Consumers who sought to return merchandise purportedly had to pay a restocking fee, while others paid for the products in order to avoid the burden or expense of the return policy. Prices were also typically higher than the amount quoted by defendants, the complaint asserted.
Companies: Liberty Supply Co.; Nor-Jay Enterprises, Inc.
News: ConsumerProtection FederalTradeCommissionNews