SPRINGFIELD, Ill. (Legal Newsline)-The Illinois attorney general's office has reached a settlement with an in-state company accused of selling advertising space it falsely claimed would help local school sports programs.

The settlement announced this week by Attorney General Lisa Madigan ensures that small business owners who bought ad space from Loyalty Publishing, Inc., doing business as All-Star Publishing, would be refunded for ads they bought on local school sports schedule posters.

All-Star Publishing stopped producing the sports schedule posters after Madigan filed her lawsuit against the Peoria, Ill.-based company for purporting to be affiliated with local schools when there was no such relationship.

The company has already repaid more than $27,000 to consumers, the attorney general's office said.

"My office continues to work on this case to ensure all impacted consumers and small business owners regain the money they believed would be contributed to the school sports programs in their communities," Madigan said in a statement. "I encourage these business owners to file complaints with my office as soon as possible."

The settlement requires the company to provide full refunds to any additional parties who purchased advertising on school sports posters, as long as they file a claim with the attorney general's office by Sept.12.

The deal, win which the company admitted no wrongdoing, also requires Loyalty Publishing to contribute $5,000 to the AG's consumer enforcement and education fund, which will be used to bankroll consumer protection programs.

The settlement also prohibits Loyalty Publishing from using a school's name or identity without prior written authorization. The company is also barred from telling consumers that funds raised will go toward school athletic programs if no donation or only a nominal donation is to be made.

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.