Marketer Settles FTC 'Toner-Phoner' ChargeModern Concept Marketing has agreed to pay $2 million to settle Federal Trade Commission charges that it violated the Telemarketing Sales Rule in its marketing of laser-printer toner cartridges.
The FTC accused the company of "toner-phoner" fraud, an office-supply scam against which the agency began a crackdown in 1999's "Operation Misprint." The FTC accused Modern Concept, which was charged as part of the 1999 operation, of using telemarketers to misrepresent to consumers that its products were new Hewlett-Packard and IBM/Lexmark products.
In fact, the toner cartridges sold by Reseda, CA-based Modern Concept were mainly used cartridges that had been refilled, the FTC charged.
The FTC also alleged that Modern Concept charged higher prices than the prices being charged for similar products and also charged shipping and handling fees reaching into the hundreds of dollars.
Modern Concept also billed consumers for products supposedly sent on a free-trial basis and shipped consumers larger orders than they had requested, according to the FTC.
The money paid by the company to settle the lawsuit will go toward repaying consumers, the FTC said. The company also agreed to put up a $1 million bond before doing further marketing of toner cartridges and to make numerous changes in its marketing practices.