Tuesday, November 25, 2008
Attorney General Abbott Pursues Enforcement Action Against Two Web-based-based Electronic RetailersAUSTIN – Texas Attorney General Greg Abbott today charged two online digital camera and electronics retailers with conducting an unlawful bait-and-switch sales scheme. Today’s enforcement action seeks restitution for Texans who suffered financially because of the defendants’ unlawful conduct.
According to state investigators, Broadway Photo, L.L.C. and Starlight Camera & Video Inc., both of Brooklyn, N.Y., attempted to attract customers by offering the lowest retail prices on price-comparison Web sites. Once customers selected merchandise and made credit card purchases via the defendants’ Web sites, customers were notified that their orders had been processed. Despite the order-processing notice, customers were subsequently asked to call a specified telephone number to confirm their orders.
However, rather than use the calls to confirm customers orders, the defendants instead initiated aggressive, high-pressure sales pitches promoting over-priced accessories, including memory cards and batteries. The defendants’ telemarketers insisted these upgraded accessories were needed in order for the customers’ confirmed merchandise to function normally.
|Attorney General's lawsuit against Broadway Photo, L.L.C.|
|Attorney General's lawsuit against Starlight Camera and Video Inc.|
When customers refused these offers, the defendants told the customers the confirmed merchandise was substandard and lacked warranties. The defendants’ telemarketers encouraged customers to purchase different, more expensive products. If customers refused, the defendants canceled the orders, claiming the products were indefinitely back-ordered. When the defendants actually did ship orders, customers who intended to purchase new merchandise often received used or refurbished products.
The Office of the Attorney General is seeking injunctions halting this conduct and civil penalties of up to $20,000 per violation of the Texas Deceptive Trade Practices Act.