"Operation Misprint' Defendants Settle FTC Charges:

Toner Scheme Officer to Post $750,000 Performance Bond

For Release

Business Services Center, Inc., and Central Imaging Systems, LLC, operating as a common enterprise, and their principals, Thomas B. Ford and his mother, Prudence C. Ford, have agreed to settle Federal Trade Commission charges that they misrepresented themselves as consumers' regular photocopier toner supplier and shipped and billed consumers for unordered photocopier toner. The case was filed in federal district court as part of "Operation Misprint," a multi-agency effort to crack down on bogus office and maintenance supply telemarketing schemes that targeted large and small businesses and non-profit organizations. As part of the settlement, Thomas Ford, who spearheaded the companies' operations, is required to post a $750,000 performance bond before engaging in future telemarketing activities or in the sale of photocopier toner or other nondurable office supplies. The settlement also provides for a $5,000,000 judgment against all of the defendants.

In December 1999, the Commission filed its complaint against Business Services Center and Central Imaging, which were operating out of a single Laguna Hills, California location, and against Thomas Ford and Prudence Ford. The FTC alleged that the defendants duped their victims into accepting and paying for shipments of unordered photocopier toner by masquerading as the consumers' regular supplier or the photocopier manufacturer. According to the FTC, if consumers refused to pay for the toner, the defendants, in some instances, used threats, intimidation, profanity or obscene language to try to get payment. When this tactic didn't work, the defendants often tried to negotiate a lesser payment than stated on the invoice, or tried to get the consumer to pay a substantial "restocking fee."

The settlement announced today resolves the case. The settlement, which was approved by the court, prohibits the defendants from committing future violations of the FTC Act and the Telemarketing Sales Rule. The settlement prohibits the defendants from making any misrepre-sentations in connection with the sale of photocopier toner or any other nondurable office supply. The defendants are also prohibited from making any misrepresentations concerning any goods or services that they market in the future.

In addition to Thomas Ford posting a $750,000 performance bond, the settlement requires him to liquidate his substantial brokerage account and turn over most of the proceeds to the FTC. Similarly, Prudence Ford is required to pay $75,000 to the FTC. This monetary relief may be used by the FTC for consumer redress. The settlement also includes a $5,000,000 judgment against the defendants. This judgment will be suspended as to individual defendants Thomas Ford and Prudence Ford if they make the payments required by the settlement order. The FTC has based its decision to suspend the judgment against the Fords by relying upon the financial information these defendants provided to the FTC. In the event the individual defendants made any material misrepresentation or omission about their financial situation or condition to the FTC, the settlement provides that the $5,000,000 judgment will be reinstated and will become immediately due and payable. The settlement also includes various recordkeeping and reporting requirements designed to assist the FTC in monitoring the defendants' compliance.

The Commission vote to approve the settlement was 5-0. The stipulated judgment and order was filed and entered by the U.S. District Court, Central District of California, Southern Division, in Orange County, California, on September 11, 2000.

NOTE: This stipulated final judgment and order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Stipulated judgments and orders have the force of law when signed and entered by the judge.

 

Copies of the stipulated judgment and order will be available shortly. Copies of other documents associated with "Operation Misprint," which involved several similar cases filed against illegal toner operations, 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 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

MEDIA CONTACT:

Brenda Mack

Office of Public Affairs

202-326-2182

STAFF CONTACT:

James Golder or James Elliott

Southwest Region

214-979-9376 or 214-979-9373

 

(Civil Action No. SACV-99-1513 DOC (ANx)) (FTC Matter No. X000007)

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