Schneiderman reaches settlement with Michaels over advertising

By Bryan Cohen | Sep 19, 2011


ROCHESTER, N.Y. (Legal Newsline) - New York Attorney General Eric. Schneiderman announced a $1.8 million settlement on Monday with a retailer of arts, crafts, scrapbooking and custom framing over alleged deceptive advertising practices.

Michaels Stores allegedly misled its consumers into thinking they were receiving steep discounts over a two-year period. Schneiderman alleged that Michael's advertised its "customer framing" as a sale product of 50 percent off for at least 104 consecutive weeks.

The law prohibits never ending sales. Schneiderman alleges that newspaper flyers, online flyers, in-store banners and signs all advertised the custom framing as a sale, advertising in at least one of these forms every day for two years. The ads allegedly stated that custom framing was either at least 50 percent off or a certain dollar amount off.

"For years, Michaels duped consumers into thinking they were receiving huge discounts, when in fact, they were simply paying the regular store price," Schneiderman said. "Through deceptive advertising practices, this company violated the law and took advantage of hardworking consumers trying to save money. In addition to the civil penalties, the company is paying for their actions by providing $1 million in school supplies for hundreds of school districts statewide."

Michaels has 48 stores in the state of New York that are frequented by parents, students and teachers to purchase school supplies. As part of the settlement, Michaels will be required to give back to the public schools in the communities in which their stores are located. The action may benefit as many as 724 school districts throughout the state, with $1 million in gift cards for school supplies.

As part of the settlement, the company will change its advertising practices, contribute $1 million in arts and craft supplies to public schools throughout the state, and pay $800,000 in civil penalties.

Schneiderman alleged Michaels violated General Business Law (350-D) for false advertising.

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