05/12/2011

News / DVD Mail-Order Company Agrees to $186,000 in Penalties and Fees, and Binding Arbitration with Consumers, Under Consent Order with NJ Division of Consumer Affairs

NEWARK – Comm-Services LLC, a Monmouth County-based DVD mail-order company, and its owner and manager, have agreed to abide by the decisions of the State Division of Consumer Affairs’ binding arbitration process with 78 New Jersey consumers who complained of unauthorized credit card charges, as part of a Consent Order signed with the Division.

The company along with its owner, Abraham S. Cohen, formerly of Long Branch, and manager, Elliott Mavorah of Long Branch, also agreed to pay the Division $186,000, including $175,000 in civil penalties and $11,000 in investigative costs and attorneys’ fees. The subjects paid an initial $11,000 installment to the Division on May 3, the day the Consent Order was executed, and will pay $50,000 on or before May 31.

The State will suspend the $125,000 balance of the civil penalties provided that, over the next five years, Comm-Services and its owner and manager comply with the terms and conditions of the Consent Order.

“The Division of Consumer Affairs fought and won a clear victory for New Jersey’s consumers,” Attorney General Paula T. Dow said. “With this Order, the State holds a $125,000 penalty over the heads of Comm-Service and its owner and manager, should they fail to honor binding arbitration with consumers, or otherwise fail to comply with the settlement terms.”

Also under the Consent Order, the Division of Consumer Affairs will refer any new consumer complaints to Comm-Services for resolution. If the company disputes a new complaint or requested relief, the matter will be referred to the Division’s Alternative Dispute Resolution Unit for binding arbitration.

“New Jersey will not let businesses get away with abusing consumers through unauthorized credit card charges, deceptive ads, or confusing and unspecified terms and conditions,” Thomas R. Calcagni, Acting Director of the New Jersey Division of Consumer Affairs, said. “This Order will provide just relief to the consumers who were affected, and will ensure that Comm-Services and its owners and operators take seriously their legal obligations under the Consumer Fraud Act.”

The Division alleged that Comm-Services, through the conduct of Cohen and Mavorah, violated the New Jersey Consumer Fraud Act (CFA) and Advertising Regulations by placing unauthorized charges on consumers’ credit cards after mailing DVDs the consumers did not order – with such anti-classic movies as “Rescue from Gilligan’s Island,” “King of the Cowboys,” “At War With the Army,” and “I Wonder Who’s Killing Her Now?” Comm-Services, Cohen, and Mavorah denied committing any violations of the CFA or Advertising Regulations.

The subjects agreed in the Consent Order that they will not charge consumers for merchandise they did not order; will not charge consumers’ credit cards without the consumers’ express authorization; will disclose in advertisements the complete cost of merchandise including shipping and handling; and will clearly and conspicuously set forth all disclaimers that apply to the sale of merchandise.

The Monmouth County Office of Consumer Affairs played a critical role in this resolution, by forwarding complaints to the State, and assisting with the investigation.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its Web site, www.NJConsumerAffairs.gov, or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.

Deputy Attorney General Gina M. Betts of the Consumer Fraud Prosecution Section represented the Division of Consumer Affairs in this matter.

http://www.nj.gov/oag/newsreleases11/pr20110509d.html

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