Connecticut Mail Order House Operators Banned from the Mail Order Business

International Direct, Inc., a Stamford, Connecticut, mail order house, its counterpart, American Security Products, Inc., and their officers, have agreed to settle Federal Trade Commission charges that they violated the FTC's Mail or Telephone Order Merchandise Rule and the FTC Act by failing to deliver mail order goods in a timely manner, issue refunds or provide notification of delays to consumers. In two separate settlements, all of the defendants would be prohibited from violating the Rule in the future. In addition, the individual defendants would be banned from various aspects of the mail order business.

The Mail or Telephone Order Merchandise Rule requires a company that sells merchandise over the phone or through the mail to ship ordered merchandise within the time stated in its ads or catalogs. If no time is stated, the company must send the merchandise within 30 days of receiving the properly completed order. If a company is unable to ship the order before the deadline, it must send the consumer an option notice which gives the consumer the choice of agreeing to a delay or cancelling the order and receiving a prompt refund. When there is a subsequent delay, the company must send a second option notice and, if the consumer does not respond, must cancel the order and issue a prompt refund. (The delay notice also must give the consumer a cost-free method of responding.)

In April 1997, the FTC filed a complaint in federal District Court against International Direct, Inc., Daniel T. Connolly, Debra A. Connolly, American Security Products, Inc., Maier "Mike" S. Levine and Vivian D. Levine. Defendant Debra Connolly was also known as Debra Levine, Debra Levine Connolly, and Debra A. Connolly. The FTC alleged that the defendants violated the Mail Order Rule when they promptly processed thousands of consumers' payments, but did not ship any merchandise at all, issue refunds or notify consumers of delays.

The proposed settlement with International Direct, Inc., American Security Products, Daniel T. Connolly and Debra A. Levine Connolly, which requires the court's approval, acknowledges their admission of liability. The settlement would prohibit the defendants from future violations of the Rule, and would permanently bar defendant Debra A. Connolly from engaging in the mail order business. The settlement would prohibit defendant Daniel T. Connolly from violating the Mail Order Rule and from occupying a position of authority in a mail order business. All of the defendants have agreed to a suspended judgment in the amount of $7 million -- which would become payable if it is determined that they misrepresented their financial disclosure information.

In a companion settlement, which also requires the court's approval, defendants Maier S. Levine and Vivian D. Levine would also be prohibited from future violations of the Mail Order Rule and would be permanently banned from engaging in mail order activities.

The settlements also contain various reporting and recordkeeping requirements that would assist the FTC in monitoring the defendants' compliance.

The Commission vote to file the consent judgments was 4-0. The settlements were filed in the U.S. District Court for the District of Connecticut, in New Haven. The settlement with the International Direct defendants was filed on 7/29/98. The Levine settlement was filed on 7/31/98. Both settlements are subject to court approval. The FTC's Cleveland Regional Office conducted the investigation, with invaluable assistance from the U.S. Attorney's office for the District of Connecticut and the State of Connecticut Department of Consumer Protection.

Copies of the news release and the stipulated final judgment, as well as other document associated with this case, are available from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261.

Copies of news releases and other materials are also available the FTC's web site at < http://www.ftc.gov >. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.