WASHINGTON (Legal Newsline) - The Federal Trade Commission (FTC) announced Sept. 25 that Telestar Consulting Inc. and owner Karl Wesley Angel will pay $7 million to settle allegations of tricking child care centers, schools, and police and fire departments into buying products that were not ordered.
According to allegations, the defendants conducted a scheme that involved offering an initial shipment of free or low-cost products. Once a person agreed to the deal, the defendants would purportedly send additional products that the person never agreed to buy. If a person complained, the defendants would threaten to send him or her to “collections.”
“Billing for unordered merchandise is against the law, and small businesses like those affected here are under no obligation to return or pay for items they did not order,” FTC acting chairman Maureen K. Ohlhausen said. “This enforcement action is yet another example of the FTC’s efforts to protect hard-working small businesses from scams.”
The FTC voted 2-0 to authorize the staff to file the stipulated order. The order was entered Aug. 30 in U.S. District Court for the Central District of California.