FTC targets merchants with nefarious telemarketing tactics
July 13, 2017
— The Federal Trade Commission announced that it obtained court orders against two Maryland-based office supply operations in July charged with tricking small businesses, nonprofit organizations and other consumers into paying for overpriced office and cleaning supplies they never ordered.
The orders ban the companies and their principals from telemarketing office and cleaning supplies.
The FTC stated that billing for unordered merchandise is against the law, and consumers do not have to return or pay for items they did not order.
According to the FTC, the Lighting X-Change defendants were part of a telemarketing scheme operating under various names, including Lighting X-Change, American Industrial Enterprises, LMS Lighting and Maintenance Solutions, Easton Chemical Supply and Werner International Enterprises.
The Standard Industries defendants participated in a different telemarketing scheme that used names such as Midway Industries, Commercial Industries, National Lighting & Maintenance, State Power & Lighting, Standard Industries, Essex Industries, Johnson Distributing, Hansen Supply, Environmental Industries and Mid Atlantic Industries.
The FTC charged both enterprises with engaging in similar deceptive conduct. When calling consumers, telemarketers did not disclose that they were making a sales call, falsely claimed to have done business with the consumers before and falsely claimed they wanted to send consumers a free sample or catalog, according to the FTC. Then they sent light bulbs and cleaning supplies without having disclosed any price, and later, sent an invoice for an amount far above the market price for such items.
The Lighting X-Change order imposes a judgment of more than $6.2 million and the Standard Industries order imposes a judgment of more than $58 million. All of the judgments are suspended based on the defendants' inability to pay. The full judgment will become due against any defendant found to have misrepresented their financial condition.
The FTC's resource on small business scams is located on the FTC website
There are ADA resources on information concerning scams, including: