FTC Charges Telemarketing Firms With Fraud

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The Federal Trade Commission has slammed an order against Handicapped Industries Midwest Inc., Tempe, AZ, and other companies for selling household goods at exorbitant prices by falsely claiming that their employees were disabled.

All of the companies being charged have agreed to the order, which prohibits them from falsely representing that all or most of their employees are handicapped, or that purchases would benefit the handicapped or disabled.

The FTC claimed that the businesses used names that implied a connection to the handicapped community, such as Handicapped Industries, Jobs for the Disadvantaged, and Reliable Handicapped Workers, and that their telemarketers told consumers that purchases of household goods -- such as light bulbs, room fresheners and garbage bags -- would benefit the firms' handicapped workers. Not only did the firms charged by the FTC not have any handicapped workers, but the prices of the items being sold were hiked up considerably, according to the FTC.

"False appeals to consumers' charitable nature just to fill your own pocket is a despicable act," said Jodie Bernstein, director of the FTC's Bureau of Consumer Protection. "It tarnishes the reputations of legitimate organizations that truly benefit those in need, because it leaves consumers skeptical about charitable solicitations."

The FTC's complaint and final order name the following corporate and individual defendants: Crooked Oak Investments Inc.; DHI Corp.; Handicapped Industries Midwest Inc.; Handicapped Industries Northwest Inc.; Handicapped Industries Southeast Inc.; Lightning Tree Inc.; The Right Path Inc.; Stone Fulfillment & Shipping Co.; Handicapped Industries; Disadvantaged and Handicapped Industries Corp.; Jobs for the Disadvantaged; Workshop for the Disadvantaged; Reliable Handicapped Workers; Bruce Holley Inc.; B.H. Industries; T.J. Beard Inc.; Bruce Edward Holley; Benjamin Wade Holley; Robert Dale Holley; Christopher Jay Cottet; Terry Jeff Beard; and Joann Porter.

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