Madigan files restaurant placemat suit
SPRINGFIELD, Ill. (Legal Newsline) - In a lawsuit filed today by Illinois Attorney General Lisa Madigan, a Springfield man's two marketing firms are alleged to have deceptively solicited small businesses nationwide to purchase advertising on local restaurant placemats that were never produced or never used by the restaurants.
The suit, filed in Sangamon County Circuit Court, names Andrew Ross and two companies that he operates - Nationwide Marketing and Coast to Coast Advertising, both doing businesses as Nationwide Advertising.
"Small businesses are already struggling to overcome today's difficult economic conditions," Madigan said. "The last thing business owners need is to be targeted for false advertising opportunities that clearly will never benefit their bottom lines."
Eighty-two consumer complaints against the businesses were made with Madigan's office by consumers in Adams, Champaign, Macon, McLean, Peoria, Randolph, Saline, Sangamon and Vermilion counties, as well as 15 complaints from consumers outside of Illinois.
Through telemarketing sales agents, Ross allegedly sold advertising space to small business owners that would be displayed on placemats at restaurants in the local communities of the purchasing business.
Madigan's lawsuit alleges that the telemarketers falsely represented to potential customers that the defendants had contracts with restaurants to supply the placemats when, in fact, most of the restaurants mentioned in sales pitches were unaware of the defendants and were party to no such contract.
During the telemarketing call, charges would allegedly be placed on customers' credit cards with the defendants sending consumers written contracts later. The written contracts allegedly indicated that customers would be automatically billed each year unless the contracts were canceled. Further, the contracts allegedly stated that the defendants were not responsible for the actual usage of the placemats by the restaurants.
Madigan alleges in her lawsuit that the defendants failed to notify customers of the terms of the contract in initial sales calls and later failed to give refunds to small business customers who requested them.
Madigan's complaint asks the court to order that consumers be paid restitution as well as asking for a $50,000 civil penalty and an additional $50,000 penalty for each violation of state law committed with the intent to defraud. The lawsuit also seeks all costs associated with the investigation and prosecution of the case.