Office Supply Operators Who Conned Nonprofit Organizations and Small Businesses Banned from Telemarketing
The defendants deceived small business customers into buying office supply products at higher prices or in larger quantities than they had agreed to
The operators of an office supply business accused of bilking millions of dollars from nonprofit organizations and small businesses will be banned from telemarketing under a settlement with the Federal Trade Commission (FTC).
The settlement resolves FTC charges filed in December 2015 that the defendants deceived small business customers into buying office supply products at higher prices or in larger quantities than they had agreed to.
When the customers complained that they had received too many products at prices up to 10 times higher than expected, the defendants aggressively sought payment or demanded that the customer pay hefty return shipping and restocking fees to send the unwanted products back. However, a federal court halted the operation and froze the defendants' assets pending litigation.
Under a stipulated final order announced by a federal court, Mia L. McCrary, John B. Hart, Norma J. Hart, Liberty Supply, Nor-Jay Enterprises, and Texas 110 will be banned from telemarketing and from misrepresenting any product or service. Before asking consumers for their billing information or consent to buy any product or service, the defendants must clearly disclose the total cost, all material restrictions or conditions, the terms of any refund policy and, if they have a policy not to make refunds, cancellations, exchanges, or repurchases, a statement to that effect.
The order also prohibits the defendants from causing consumers' billing information to be submitted for payment without the consumer's express informed consent, and from selling or otherwise benefitting from consumers' personal information and failing to dispose of it properly.
The order imposes a $4,560,000 judgment against Mia McCrary, John B. Hart and Liberty Supply, and a $2,200,000 judgment against Norma Hart and Nor-Jay Enterprises, which will be partially suspended when John Hart and Norma have surrendered over half a million dollars in certain assets and Mia McCrary has surrendered a $10,000 bank account and certain property.
The full judgment will become due immediately if the defendants are found to have misrepresented their current financial condition.