California Telemarketer Settles FTC Charges of Alleged Office Supply Scams

One of the largest office supply operations in Southern California charged with sending unordered merchandise to small businesses around the country and then billing them for it has agreed to settle Federal Trade Commission charges that it was violating federal law. The settlement requires Ultra Ribbons, Inc., and Allstate Imaging, Inc., based in Chatsworth, California, and their principals to pay a $500,000 civil penalty and consumer redress.

The FTC's complaint names Ultra Ribbons, Inc., Allstate Imaging, Russell Leventhal, Stuart Leventhal, Frank Montelione and Alan Jurick. According to the FTC, the defendants' telemarketers contacted the businesses at random offering to send "free trial" shipments of ribbons, cartridges or other office supplies. They also guaranteed that their products would last twice as long as those of the original manufacturer and told the businesses that if they were not satisfied with the products, they could return them during the trial period at no cost. The FTC alleged that the defendants frequently refused to accept returns and used abusive collection practices to intimidate businesses into paying for the overpriced merchandise. In addition, the FTC alleged, the invoices often included exaggerated, undisclosed shipping and handling charges, and the initial shipment was often followed with additional unordered shipments and invoices.

To settle the FTC charges, the defendants would be required to pay a $500,000 civil penalty and provide redress to all businesses that complained about Ultra Ribbon or Allstate Imaging to a Better Business Bureau or a government agency since 1996. Ultra Ribbons and Allstate Imaging would be barred from shipping unordered goods, from billing for unordered goods, and from misrepresenting the purpose of their phone calls, the fact that samples are free, that a person has ordered supplies, or that businessess have an obligation to pay for merchandise they didn't order. In addition, the settlement would bar the defendants from attempting to collect money from businesses which had received unordered merchandise.

The Commission vote to authorize staff to file the complaint and proposed consent was 5-0.

The complaint and proposed consent decree was filed on April 17, 2000, in the U.S. District Court for the Central District of California, Western Division, by the Department of Justice at the request of the FTC. The settlement is subject to court approval.

NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees have the force of law when signed by the judge.

Copies of the news release are available from the FTC's web site at http://www.ftc.gov and copies of the complaint and proposed settlement will be available shortly 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.

(FTC File No. 992 3216)
(Civil Action No. CV-00-04042 R)