N.C. AG stalls engine company over bad business practices
RALEIGH, N.C. (Legal Newsline) - North Carolina Attorney General Roy Cooper announced on Wednesday that he has obtained a consent judgment against a custom engine business that allegedly took more than $800,000 from consumers for services it never provided.
Cooper's court order requires T and L Engines to clean up its act and ship the engines it has promised.
"When a business accepts your money, you expect them to deliver what they promised," Cooper said. "My office will continue to look out for North Carolina consumers and make sure they're treated fairly."
T and L Engine Development Inc., owner Lloyd McCleary Sr. and employee Lloyd McCleary Jr. allegedly collected up-front fees for engines that they never delivered.
The company advertised its custom engines on the its website and on eBay. It asked for a substantial down payment before work would begin and allegedly asked for the balance to be paid in full before shipping the engine.
Cooper's office received over 120 complaints from consumers who allegedly paid for the engines but never received them. Some customers were offered refunds, but never received them. Consumers' losses totaled more than $800,000.
Cooper alleges that the company violated a federal rule called the federal Mail and Telephone Order Merchandise Rule that protects consumers from orders that don't arrive when promised. Under the rule, companies that fail to deliver on time must give customers the option of a later delivery date or a refund canceling the order.
"If you pay for something that doesn't arrive, you have the right to a refund," Cooper said.
Under terms of the judgment, the company is permanently banned from taking money upfront for any products or services unless it first secures a $500,000 bond as a way to ensure that customers won't lose out. It can also deposit money with an escrow agent until the product is shipped.
T and L Engine Development Inc., which also conducted business as T and L Engines, was dissolved in August by the North Carolina Secretary of State.
The agreement also requires the defendants to auction off all business assets and equipment and the owner's primary residence and use the money to pay refunds to consumers.