A suburban Chicago-area telemarketing company charged with sending unordered merchandise to small businesses around the country and then billing them for it has agreed to settle Federal Trade Commission and State of Illinois charges that it was violating federal law. The settlement bars National Maintenance Supply, Inc., and its owner Jack F. Nugent, from any future telemarketing of office, cleaning or janitorial supplies and requires payment of $80,000 in consumer redress.
National Maintenance Supply is located in Orland Park, Illinois and was initially sued as part of "Operation Clean Sweep," a joint law enforcement operation by the FTC, the Illinois and Indiana Attorneys General, and the U.S. Postal Inspection Service, aimed at fraudulent telemarketers in the Chicago area who target small businesses.
On July 2, 1999, the FTC asked the United States District Court for the Northern District of Illinois to join the State of Illinois' law suit against National Maintenance Supply, Inc. The FTC alleged that National Maintenance Supply targeted churches and other small businesses. According to the FTC, Nugent and his employees contacted the organizations and claimed that National Maintenance Supply had previously done business with the organization, was vertifying a purchase order, or was seeking the name of a person authorized to receive merchandise. The defendants would then mislead the organization's employee into believing that a purchase had been authorized or, in some instances, simply shipped the goods along with an invoice for the price of the merchandise and shipping and handling fees. The settlement announced today resolves the case.
To settle the FTC and State of Illinois charges, Nugent and National Maintenance Supply have agreed to pay $80,000 in consumer redress and are barred from advertising, promoting, marketing, or telemarketing office or cleaning supplies in the future. They are also barred from shipping unordered goods, from billing for unordered goods, and from misrepresenting the purpose of their phone calls, that a person has ordered supplies, or that consumers have an obligation to pay for merchandise they didn't order. The settlement further bars the defendants from selling, renting or leasing the lists of consumers they targeted and from attempting to collect money from people who received unordered merchandise.
The Stipulated Order For Permanent Injunction was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division in Chicago.
NOTE: A Stipulated Order For Permanent Injunction is for settlement purposes only and does not constitute an admission by the defendant of a law violation. The stipulated order was signed by the judge and has the force of law.
Copies of the Stipulated Order are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 877-FTC-HELP (877-382-4357); TDD for the hearing impaired 202-326-2502. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
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