FTC Bans Light Bulb, Cleaning Product Merchants from Telemarketing Office Supplies

The merchants allegedly billed small businesses and nonprofits for unwanted supplies

FTC Bans Light Bulb, Cleaning Product Merchants from Telemarketing Office Supplies
Image: Pixabay
July 12, 2017

The Federal Trade Commission (FTC) has gotten court orders banning two office supply operations from telemarketing office and cleaning supplies.

The FTC alleges that the defendants tricked small businesses, nonprofits, and other consumers into paying for overpriced office and cleaning supplies that they never ordered.

It is against the law to bill consumers for merchandise that they didn't order. Consumers are not obligated to return or pay for such items.

The Defendants

The FTC claims that the Lighting X-Change defendants took part in 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 agency alleges that the Standard Industries defendants participated in a separate telemarketing operation using names like 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 Details

Both enterprises were charged with engaging in similar deceptive conduct. When they called consumers, the telemarketers did not disclose the fact that they were making a sales call. They made false claims about having done business with the consumers previously and wanting to send a free sample or catalog to the consumers.

The defendants then sent light bulbs and cleaning supplies without disclosing a price and later issued an invoice for amounts much higher than the market price for similar merchandise. Those organizations that paid, not realizing that they had not ordered the items, became targets for future shipments and invoices.

The Orders

The final orders ban the defendants from telemarketing office or cleaning supplies that are not durable. Whenever they sell any other good or service, they are prohibited from making false claims regarding past business transactions with consumers, sending only a free sample or catalog, or who ordered the items.

Both defendants also had a judgement imposed: more than $6.2 million for the Lighting X-Change defendants, and more than $58 million for each of the Standard Industries defendants (except for Alan Landsman, whose judgement is $44 million). All the judgements are suspended based on the defendants' inability to pay.

The orders also stipulated that a receiver appointed by the court should take over all the assets of the Standard Industries companies and many of defendant Eric Epstein's, all of which total more than $5 million. The FTC plans to return the funds paid by defendant Benjamin Cox, as well as assets held by the Standard Industries receiver, to the defendants' victims.