For Release: October 23, 2003
An Internet operator who used auction houses to “sell” computers and musical equipment that he never delivered has agreed to settle Federal Trade Commission charges that he violated federal laws. The settlement bars the operator from: selling goods or services via Internet auctions for life; making misrepresentations in the sale of goods or services; and from violating the FTC’s Mail Order Rule. It requires that he post a $35,000 performance bond before engaging in telemarketing and requires him to pay $5,820 for consumer redress.
In April 2003, the FTC targeted Morgan Engle as part of Operation Bidder Beware, a law enforcement crackdown by the FTC and 29 state Attorneys General targeting Internet auction fraud. That initiative resulted in 57 criminal and civil law enforcement actions and a related consumer education campaign. Auction fraud is the single largest category of Internet related complaints in the FTC’s Consumer Sentinel database, which logged more than 51,000 auction complaints in 2002.
The agency filed suit against Engle in U. S. District Court in Atlanta. The FTC charged that he advertised computers and musical instruments and equipment for sale on various Internet auction sites. As the bidding progressed, he sometimes circumvented the auction house process by e-mailing consumers or telephoning them to encourage the purchase and discuss payment terms and delivery details. But he rarely delivered the goods and rarely provided refunds, according to the FTC. The FTC alleged that Engle’s practices violated the FTC Act and the Mail Order Rule. The settlement announced today ends the litigation.
NOTE: This stipulated final judgment and order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent judgments have the force of law when signed by the judge.
Copies of the stipulated final judgment and 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. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
(FTC File No. X03 0041)
(Civil Action No. 1:03-CV-1072-JEC)