ROBERT L. PITMAN
United States Attorney
Western District of Texas
Assistant United States Attorney
Congress Avenue, Suite 1000
Austin, Texas 78701
Texas Bar No.
(512) 916-5858
(512) 916-5854 (fax)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
UNITED STATES OF AMERICA CIVIL NO.
Plaintiff, COMPLAINT FOR
CIVIL PENALTIES, INJUNCTIVE
v. AND OTHER RELIEF
NETPLIANCE, INC.,
a Delaware corporation,
Defendant.
Plaintiff, the United States of America, acting upon notification and authorization to the
Attorney General by the Federal Trade Commission ("Commission"), for its Complaint alleges
that:
1. Plaintiff brings this action under Sections 5(a)(1), 5(m)(1)(A), 13(b), and
the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 45(a)(1), 45(m)(1)(A), 53(b), and
56(a), and § 108(c) of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1607(c), to obtain
(a) injunctive or other relief for defendant's deceptive practices in violation of Section 5(a) of
FTC Act, 15 U.S.C. § 45(a); (b) monetary civil penalties and injunctive and other relief for
defendant's violations of the Commission's Trade Regulation Rule Concerning the Sale of Mail or
Telephone Order Merchandise (the "Mail Order Rule" or "Rule"), 16 C.F.R. Part 435; and
(c) injunctive or other relief for defendant's violations of the TILA, 15 U.S.C. §§ 1601-1667f, and
COMPLAINT Page 1
its implementing Regulation Z, 12 C.F.R. § 226.
JURISDICTION AND VENUE
2. This Court has jurisdiction over this matter under 28 U.S.C. §§ 1331, 1337(a),
1345, and 1355 and under 15 U.S.C. §§ 45(a)(1), 45(m)(1)(A), 53(b), 56(a), and 1607(c).
3. Venue in the Western District of Texas is proper under 15 U.S.C. § 53(b) and
under 28 U.S.C. §§ 1391(b-c) and 1395(a).
THE DEFENDANT
4. Defendant Netpliance, Inc. is a Delaware corporation with its principal office or
SNIPPETS:
United States Attorney Western District of Texas Assistant United States Attorney Congress
Plaintiff, the United States of America, acting upon notification and authorization to the
its implementing Regulation Z, 12 C.F.R. § 226.
Defendant Netpliance, Inc. is a Delaware corporation with its principal office or place of
At all times relevant to this complaint, the acts and practices of defendant alleged in this
Defendant has manufactured, advertised, labeled, offered for sale, sold, and distributed
These advertisements contain statements about the performance of the i-opener and the cost of
In its advertisements for the i-opener, defendant has directed consumers to call a toll-free
defendant asks consumers for their credit card numbers and defendant bills a charge directly
Between November 1999 and March 2000, defendant told numerous consumers who purchased the
Contrary to this representation, on or around March 2000, defendant charged consumers who had
In numerous instances between December 1999 and April 2000, defendant failed to ship
Section 5also prohibits a practice as unfair if it causes or is likely to cause substantial
In truth and in fact:
the representations set forth in Paragraph 17 are deceptive acts or practices in violation of
In light of the representation contained in Paragraph 20, the failure to disclose the facts
Defendant's practice of charging and debiting consumers' credit or debit card accounts
implements Section 166 of the TILA, 15 U.S.C. § 1666, provides that:
The Mail Order Rule was promulgated by the Commission on October 22, 1975, under the FTC Act,
As used in reference to the TILA, the term "creditor" is defined in Section 103of the Truth
a separate violation for which plaintiff seeks monetary civil penalties.
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