Handicapped Industries Midwest, Inc., seven other corporations, and six individuals charged by the Federal Trade Commission with selling household goods at inflated prices by misrepresenting that their employees are handicapped or disabled have agreed to an order that would prohibit the defendants from falsely representing that all or most of the persons employed by the various enterprises are handicapped, or that such purchases would benefit the handicapped or disabled.
"False appeals to consumers' charitable nature just to fill your own pocket is a despicable act," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "It tarnishes the reputations of legitimate organizations that truly benefit those in need, because it leaves consumers skeptical about charitable solicitations."
According to the FTC's complaint, the defendants used business names that imply a connection with the handicapped community, such as Handicapped Industries; Jobs for the Disadvantaged; and Reliable Handicapped Workers, and their telemarketers told consumers that their purchase of household goods such as light bulbs, garbage bags, and room fresheners -- at prices that were two to ten times higher than competitors' prices -- would benefit the firms' workers, who were falsely depicted as being handicapped or disabled.
The stipulated order to settle the charges would prohibit the defendants from falsely representing that all or most of the persons employed by the various enterprises are handicapped; that the enterprise is a charity or non-profit organization; and that a purchase of goods is tax deductible. The settlement also would prohibit the defendants from misrepresenting the attributes of their products or any other fact that would be material to a consumer.
The FTC's complaint, and stipulated final order name the following corporate and individual defendants: Crooked Oak Investments, Inc.; D.H.I. Corporation, Handicapped Industries Midwest, Inc.; Handicapped Industries Northwest, Inc.; Handicapped Industries Southeast, Inc.; Lightning Tree, Inc., an Arizona corporation; The Right Path, Inc., and Stone Fulfillment & Shipping Company, corporations, dba Handicapped Industries; Disadvantaged and Handicapped Industries, Corp.; Jobs for the Disadvantaged; Workshop for the Disadvantaged; Reliable Handicapped Workers; Bruce Holley, Inc.; B.H. Industries; T.J. Beard, Inc.; and Bruce Edward Holley; Benjamin Wade Holley; Robert Dale Holley; Christopher Jay Cottet; Terry Jeff Beard, and Joann Porter.
The FTC's Bernstein offers these tips for consumers (and businesses) when called by a fundraiser:
- Watch out for similar sounding names. Some phony nonprofits use names that closely resemble those of respected, legitimate organizations.
- Refuse high pressure appeals. Legitimate fundraisers won't push you to give on the spot, and be wary of nonprofits offering to send a courier to collect your donation immediately.
- Give generously -- but on your own terms. Make an annual giving plan and stick to it. Identify the causes you want to support and then do your homework by checking out the charities that support these causes.
Also available from the FTC are a series of consumer and business education materials with tips on reducing the risk of being victimized by deceptive solicitations. Copies of these publications are available from the FTC's Web site at: http://www.ftc.gov and from the FTC's Consumer Response Center, located at the address below -- as well as from each state's charities regulator, typically the Attorney General or the Secretary of State.
The complaint and stipulated final judgment and order to settle the charges were filed in the U.S. District Court for the District of Arizona, in Phoenix, Arizona on August 4. This matter was handled by the FTC's Western Region offices in San Francisco and Los Angeles. The Commission vote authorizing the filing of the complaint and settlement was 5-0.
NOTE: This stipulated final judgment is for settlement purposes only and does not constitute an admission by the defendants of a law violation. The judgment is subject to court approval and has the force of law when signed by the judge.
Copies of the complaint, the stipulated final order, and the consumer brochures 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; toll-free: 877-FTC-HELP (877-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
Office of Public Affairs
Western Region, Los Angeles
Western Region, San Francisco
(Civil Action No.: 00-1496 PHX - ROS)
(FTC File No: 982 3623)