FURNITURE RETAILER REACHES SETTLEMENT WITH CONSUMER PROTECTION DIVISION OVER ADVERTISING

Attorney General J. Joseph Curran, Jr. announced today that his Consumer Protection Division has reached a settlement with a furniture retailer that the Division had alleged misled consumers into believing it offered bankruptcy liquidation furniture at bargain prices. The retailer has agreed to change its advertising and to pay $60,000 for consumer education and the Division's costs of $2,500.

Bankruptcy Authorities, Inc. (which became Sticks ‘n Stuff in August 2001), of Rainbow City, Alabama, and its president and owner, Samuel W. Kelley, operated three Bankruptcy Authorities furniture stores in Rockville, Glen Burnie and Catonsville. The Consumer Protection Division alleged that Kelley and his businesses engaged in unfair and deceptive trade practices in violation of Maryland's Consumer Protection Act by falsely representing that the stores were affiliated with the United States Bankruptcy Court or were selling bankruptcy liquidation merchandise, when that was not the case. The Division also alleged that the stores falsely represented that they were selling inventory acquired from Levitz Furniture Corporation, when they were only leasing stores formerly occupied by Levitz, and advertised discounts of "to 75 percent off" without any substantiation that the advertised discount represented a deduction from actual prices previously offered.

Without admitting that they violated Maryland's Consumer Protection Act, Samuel W. Kelley and his companies entered into an Assurance of Discontinuance in which they agreed that they will not represent that they have any affiliation with the United States Bankruptcy Court, make any representations that they are affiliated with, or selling inventory from, Levitz Furniture Corporation or any other retailer or manufacturer unless that is true, and follow certain guidelines for comparative price advertising. The guidelines require that when the company advertises a discounted price, the company must clearly state the basis for the reference price, such as the company's own regular price, a competitor's price, or a manufacturer's suggested price.

"It is deceptive for a retailer to represent that it is selling the products of a bankruptcy liquidation, at substantial price savings, when it isn't," Attorney General Curran said. "The deception hurts consumers and competitors."

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