Millions Stolen from Consumers, Agency Alleges
The Federal Trade Commission today announced that it has obtained a federal court order temporarily halting the operations of Worldwide Wallcoverings & Blinds, Inc., an Illinois corporation based in Northbrook, that has advertised discount wallpaper and blinds and promised delivery within two to three days. The Commission charged that Worldwide defrauded thousands of consumers by, in many instances, simply pocketing their money and not shipping any merchandise at all. According to the FTC, the company has obtained millions through these practices, defrauding consumers out of $500,000 in one month alone. This massive fraud has prompted record numbers of complaints to Better Business Bureaus and the Illinois Attorney General’s office.
The court’s temporary restraining order freezes the company’s assets and appoints a receiver to take control of the company. The FTC also has asked the court to issue a permanent injunction against Worldwide and its principal officers, Bruce Sears and Martha Kazak, in order to halt the scam forever and preserve funds for redress for consumers who were victims of this massive fraud.
Worldwide’s headquarters are at 333 Skokie Boulevard, Suite 101, Northbrook, Illinois. Bruce Sears and Martha Kazak are the owners of Worldwide.
According to the FTC’s complaint detailing the charges in this case, Worldwide has marketed and sold wall coverings and blinds throughout the United States since July 1993.
They have placed advertisements in national magazines including Better Homes and Gardens, Woman’s Day, Country Living, and Good Housekeeping. The ads offered free UPS shipping within two or three days on wall coverings and three days on blinds. The ads contained 800 telephone numbers for consumers to call to place their orders. For some time now, according to the FTC, the company has not shipped any orders at all. After receiving consumers’ orders and their payments for the merchandise, Worldwide typically sent consumers numerous "back order" notices informing them of delays in shipping. These back order notices did not provide consumers with the option of consenting to the delays or canceling their orders and receiving refunds, as required by the FTC’s Mail or Telephone Order Rule.
When consumers requested refunds, the FTC’s complaint alleges, the defendants typically represented to them that they would receive refunds within one to two billing cycles. Numerous consumers, however, never received these refunds as promised.
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 have received neither the items purchased nor refunds of their money. These practices have been occurring since early 1995, according to the FTC.
The Better Business Bureau of Chicago has received approximately 1,400 complaints, more than it has ever received about any company in the last several years. In addition, the Illinois Attorney General’s Office has received numerous complaints and has filed a lawsuit against the company.
A free FTC brochure for consumers, titled "Shopping by Phone or Mail," provides additional 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 authorize the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, in Chicago, on Sept. 23 under seal. The seal was lifted on Sept. 25. The court has ordered a hearing on October 7 at 3:50p.m. to consider the FTC’s request for a preliminary injunction continuing the temporary relief until the case is completed.
The FTC’s Chicago Regional Office handled the investigation, with invaluable assistance from Illinois Attorney General Jim Ryan.
NOTE: The Commission authorizes the filing of a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.
Copies of the complaint and the FTC brochure 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 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases, documents and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov
(Civil Action No. 96C6138)
(FTC File No. 962 3035)
Victoria Streitfeld, Office of Public Affairs
Chicago Regional Office
C. Steven Baker
55 E. Monroe St., Suite 1860
Chicago, IL 60603