05/13/2010

News / State and Monmouth County Furniture Retailers Settle Lawsuit

NEWARK – Attorney General Paula T. Dow and the Division of Consumer Affairs have settled a lawsuit filed against Monmouth County furniture retailers, with the defendants agreeing to resolve existing and future consumer complaints, revise their business practices and pay up to $216,938 in civil penalties and reimbursements to the state.

The Office of the Attorney General and Division of Consumer Affairs filed suit against Spectrum Home Furnishings, Inc., Charles Serouya & Son, Inc. a/k/a Gallery, CS&S, Inc. and Charles Serouya, Inc., last June in State Superior County, Chancery Division, in Monmouth County. The state’ s lawsuit alleged that companies, all owned by Charles Serouya, violated the state's Consumer Fraud Act and related regulations, among other things, by delivering defective or non-conforming merchandise and then failing to provide consumers with refunds.

Pursuant to the settlement, defendants agreed to pay $104,657.00 in civil penalties and reimbursement of the state’s attorneys’ fees and investigative costs. The $112,281.00 balance of the settlement amount, which represents civil penalties, will be suspended and automatically vacated at the end of eighteen (18) months, provided defendants comply with the terms of the Final Consent Judgment. In entering into the settlement, defendants made no admission of liability or wrongdoing of any kind.

“This settlement addresses all existing consumer complaints and requires the defendants to resolve any future complaints through binding arbitration,” Attorney General Dow said. “The defendants agreed to revise their business practices to be in compliance with our consumer protection laws and regulations.”

Under the terms of the Final Consent Judgment, the defendants agreed to:

* not accept payment for merchandise, then fail to deliver the merchandise to the consumer;
* not fail to deliver merchandise on the promised delivery date or at all;
* not deliver merchandise to consumers that is of a different quality or condition from the merchandise ordered;
* not advertise and/or offer for sale merchandise, whether through defendants’ websites or otherwise, then deliver to consumers merchandise that is of a different or inferior quality or condition of the advertised merchandise;
* in any advertisement of merchandise accompanied by a picture or illustration of the merchandise in an assembled condition when it is intended to be sold unassembled, defendants shall indicate that the merchandise is to be sold unassembled;
* clearly and conspicuously post their refund policy on defendants’ websites within thirty (30) days;
* issue refunds and/or credit card chargebacks to consumers who cancel their merchandise orders prior to delivery or return defective or non-conforming merchandise to defendants;
* deliver merchandise by the promised delivery date, or within six (6) weeks after accepting money through the mail or any electronic transfer medium for all merchandise advertised and/or offered for sale though a mail order or catalog;
* include in all contract forms and/or sales documents for household furniture the date of the order as well as the following language required by N.J.A.C. 13:45A 5.2(a);"The merchandise you have ordered is promised for delivery to you on or before (insert date or length of time agreed upon)";
* fill in the delivery date at the time the contract of sale is entered into or when the sales documents are issued, either as a specific day of a specific month or as an agreed upon length of time;
* include, within 30 days, on the first page of all contract forms and/or sales documents for household furniture the following notice in ten point bold face type, as required by N.J.A.C. 13:45A 5.3(a):
o If the merchandise ordered by you is not delivered by the promised delivery date (insert name of seller) must offer you the choice of (1) canceling your order with a prompt, full refund of any payments you have made, or (2) accepting delivery at a specific later date;
* In the event defendants fail to deliver, make a partial delivery or deliver defective and/or non conforming merchandise, defendants shall provide consumers with the option of cancelling the order for a full refund or accepting delivery at a later date;
* not charge the consumer delivery fees for replacement merchandise or merchandise to complete what was originally a partial delivery; and
* instruct their employees that, upon a consumer’s request, a manager or supervisor shall be made available to speak with the consumer, and such manager or supervisor shall be made available, but no more than one (1) business day after the request.

The defendants do not have retail stores, but maintain a warehouse in Farmingdale.

As part of the settlement, any of the 51 existing consumer complaints that remain unresolved will be referred to the Division’s Alternative Dispute Resolution (“ADR”) Unit for resolution through binding arbitration. Additionally, all consumer complaints received by the Division over the next year will be referred first to the defendants for resolution and then, if necessary to the ADR Unit.

Deputy Attorney General Sabina P. McKinney of the Consumer Fraud Prosecution Section represented the state in this action.

http://www.nj.gov/oag/newsreleases10/pr20100512b.html

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