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Post date: October 23 2002

Judge Orders Online Retailer To Enact Promised Reforms

Attorney General Spitzer today announced that a Western New York judge has ordered an on-line home furnishing and flooring retailer to pay $150,000 in refunds to dozens of consumers.

Justice Frederick J. Marshall of State Supreme Court in Erie County signed an order submitted by Spitzer's office and consented to by the operators of -- Neal Martin and Cole Martin -- requiring the firm to enact business reforms promised in an out-of-court settlement.

"The court order obtained by my office will ensure that this firm lives up to its promises and enacts necessary business reforms," Spitzer said.

Earlier this year, Spitzer's office settled an investigation against after receiving approximately 30 complaints. Through mediation efforts, the Attorney General's Buffalo Regional office obtained more than $90,000 in refunds. Many consumers had complained that the home furnishing and flooring retailer had failed to deliver ordered merchandise and had refused to give refunds. Of those consumers who did manage to secure refund checks, many soon discovered that the checks "bounced."

In settling that case this past January, the company agreed to enact reforms to address the problems underlying the consumer complaints. These reforms included:

  • confirming delivery dates in writing or e-mail;

  • implementing procedures for advising consumers of any shipping delays and offering the customers the option of a refund, other comparable merchandise, or another delivery date;

  • providing full refunds/exchanges for incorrect merchandise; and

  • providing full refunds within 30 days with additional fees for bounced checks.

Additional consumer complaints, however, established that the promised reforms were not enacted.

In July 2002, Spitzer' office filed a lawsuit charging the company and its operators with repeated and persistent fraud and deceptive business practices, and simultaneously obtained a restraining order barring from destroying or disposing of any business records.

Under the recent court order, is required to obey the terms and conditions of the previous settlement. Failure to comply could result in legal action, including possible contempt charges and an order barring the firm, and both Neal and Cole Martin, from engaging in any business in New York State.

The order also requires the firm and its principals to pay $150,000 for restitution to the nearly 60 consumers who have complained since the original settlement and to additional eligible consumers who file complaints. Any monies not claimed for restitution will be applied toward civil penalties.

Individuals have 30 days to file a complaint form with the Attorney General's office to become eligible for restitution in this case. To do so, consumers should call (800) 771-7755 or (716) 853-8400 for assistance.

This case was handled by Assistant Attorney General James M. Morrissey of the Buffalo Regional Office.