The FTC Charges FBS Violated Mail-Order Rule: Company Agrees to Pay $32,000 Penalty

The Federal Trade Commission has charged that FBS, a nationwide mail-order marketer of clothing, violated the FTC's mail-order rule.  The company has agreed to pay $32,000 to settle the charges, in a proposed consent decree filed in federal court
in New York.

The FTC's complaint charges that FBS, also known as French Boot Shop and Molbe Shoes Inc., did not inform consumers within the required time period that it could not ship ordered merchandise when promised.  In addition, FBS would deem an order cancelled but not issue cash or credit card refunds.  Instead, it offered consumers a company credit for puchases of alternative merchandise, according to the complaint. FBS also did not offer customers the option of either agreeing to a delay or cancelling their orders and receiving a refund, the complaint charges.

Under the FTC rule, when a company cannot ship merchandise on time, it must notify consumers within a specified time limit and offer customers either the right to cancel the order and receive a prompt refund or to agree to a delay.

Under the consent decree, FBS cannot violate the mail-order rule.  It is also specifically prohibited from deeming orders cancelled and offering a company credit for purchases of alternative merchandise.  It is also prohibited from sending notices which offer buyers the option of cancelling their orders and receiving a company credit rather than a refund.

The Justice Department filed the complaint and consent decree in the U.S. District Court for the Southern District of New York, at the FTC's request.  The consent decree does not become final until the court approves it.  FBS is based in New Rochelle, N.Y.

This consent judgment is for settlement purposes only and does not constitute an admission by the company that it violated the law.  Consent judgments have the force of law.

Copies of the complaint and consent decree are available from the FTC's Public Reference Branch, Room 130, 6th St. and Pennsylvania Ave. N.W., Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502.

(FTC File No. 842 3141)