A telemarketer faces a Federal Trade Commission ban on claims that the sales of products would help disabled individuals.
The agency took action against Adli Dasuqui and a pair of his companies, American Handicapped Inc. and Disadvantaged Workers Inc., alleging the defendants paid telemarketers to cold-call consumers to sell light bulbs and trash bags. Callers told consumers that they represented a charitable organization that employed disabled persons or that they themselves were disabled. They claimed that a purchase (at inflated prices, such as $30 for two light bulbs or $100 for 60 trash bags), or a donation, would help disabled individuals.
Such claims were false, the FTC alleged, as the defendants paid "only a small portion to handicapped or disabled employees, the person soliciting [was] usually not handicapped or disabled, and Defendants do not operate a charitable organization." The defendants also shipped merchandise without the consent of consumers and then sought payment for the unordered merchandise, according to the agency, which cited complaints about the defendants' practices from several states including Arizona, Iowa, and Minnesota.
The Michigan federal court complaint asserted violations of Section 5 of the Federal Trade Commission Act, the Telemarketing Sales Rule, and the Unordered Merchandise Statute.
Pursuant to the stipulated final order, the defendants are prohibited from selling anything for the "purported benefit" of disabled persons, mischaracterizing their involvement in charitable endeavors, or from making untrue claims that a consumer has ordered and agreed to pay for products. Future violations of the Telemarketing Sales Rule and the Unordered Merchandise Statute are also prohibited by the order, as are misrepresenting any material fact about any good or service, profiting from customers' personal information, or failing to properly dispose such data.
A $4 million judgment was suspended due to an inability to pay.
To read the complaint and stipulated final order in FTC v. American Handicapped, Inc., click here.
Why it matters: For appealing to consumers' sense of charity by misrepresenting that purchases or donations would help handicapped or disabled individuals, the defendants ran afoul of the FTC Act and the TSR. Adding to their legal problems: they sent unordered merchandise and then charged consumers in violation of the Unordered Merchandise Statute.