The Federal Trade Commission today announced that it has obtained a settlement of its charges against Bruce Sears and Martha Kazak, the principals of Worldwide Wallcoverings and Blinds, Inc., an Illinois corporation based in Northbrook. Last September the FTC obtained a federal court order halting the operations of Worldwide. The FTC had charged that Worldwide, which advertised discount wallpaper and blinds and promised delivery within two to three days, had defrauded thousands of consumers by, in many instances, simply pocketing their money and not shipping any merchandise at all.
The agreement with the two individual defendants, Sears and Kazak, prohibits them from misrepresenting when they will deliver ordered items or any other fact material to a consumer’s decision to purchase from them, and from violating the Mail or Telephone Order Merchandise Rule. It permanently bans Sears from the mail order industry. The agreement also requires Sears to pay the Commission the proceeds of the sale of his Sea Ray boat for consumer redress. The agreement requires Kazak to pay $3,000 for consumer redress.
Worldwide’s headquarters are at 333 Skokie Boulevard, Suite 101, Northbrook, Illinois.
Bruce Sears is the owner of Worldwide. Martha Kazak is the President.
According to the FTC’s complaint, Worldwide had advertised in national magazines, offering wall coverings and blinds at discounted rates and free shipping within two or three days.
From 1995 until September 1996, when the FTC obtained a court order temporarily halting the operation, Worldwide allegedly had failed to deliver the merchandise to most of its customers
and had also failed to issue refunds. The Better Business Bureau of Chicago had received an unprecedented 1,500 consumer complaints about Worldwide in its last two years of operation. The Illinois Attorney General’s Office received as many as 700 consumer complaints.
Thousands of consumers have paid the company on average $250 each, with purchases ranging between $12 and $6,000 each for wall coverings and blinds, and either never received the items purchased or never received refunds, the FTC alleged.
A federal district court for the Northern District of Illinois issued the temporary restraining order, which stopped the challenged practices, appointed a receiver, and froze the defendants’ assets. The court entered a preliminary injunction continuing the asset freeze and conduct restrictions. Worldwide Wallcoverings remains under the control of the receiver.
The proposed settlement with Sears and Kazak contains language that would permit the FTC to reopen the consent order in the event that the defendants misrepresented the assets in their financial statements.
A free FTC brochure for consumers, titled "Shopping by Phone or Mail," provides information about consumers’ rights for goods ordered by mail, telephone, computer, and fax machine. Copies are available at the address below.
The Commission vote to file the settlement was 5-0. It was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, in Chicago, on April 30, 1997. The settlement, which is subject to the court’s approval, was signed by the judge on May 6, 1997.
NOTE: This stipulated final judgment and order for permanent injunction is for settlement purposes only and does not constitute an admission by the defendants of a law violation. The judgment has the force of law when signed by the judge.
Copies of the settlement, as well as the FTC brochure, titled "Shopping by Phone or Mail," are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY 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. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov (no period).
(Civil Action No. 96C6138)
(FTC File No. X96 0096)