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1
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REASONS FOR SETTLEMENT
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EXTRACTED KEY WORDS
VIOLATIONS DEFENDANTS COMMISSION MODIFIED CONSENT REASONS SETTLEMENT STIPULATION REQUIRING COMPLIANCE MODIFY CONSENT DECREE PROVISIONS ENTRY TELEBRANDS CORPORATION AJIT KHUBANI ALLEGATIONS TELEPHONE ORDER TRADE CIVIL PENALTY DETAILED RECORDS AMOUNT ASSURE LAW EXPENSE MONITOR FULFILLMENT INJUNCTION FUTURE COMPLIANCE LITIGATION FOREGOING REASONS |
_________________________________________________________________
REASONS FOR SETTLEMENT
_________________________________________________________________
This statement accompanies the Stipulation to Modify Consent Decree
and Modified Consent Decree executed by defendants Telebrands
Corporation and Ajit Khubani. In 1996 the defendants entered into a
Consent Decree settling allegations that they had violated the
Commission's Mail or Telephone Order Merchandise Trade Regulation
Rule, 16 C.F.R. Part 435 (the "Rule"). The Consent Decree enjoined
them from violating the Rule, required them to pay a $95,000 civil
penalty (which they subsequently paid), and required them to maintain
detailed records of each consumer's mail or telephone order. The
Commission has reason to believe that after they entered into the
Consent Decree, the defendants violated the Rule in numerous instances
and violated a number of the recordkeeping provisions of the Consent
Decree. To remedy these alleged new Rule violations and the violations
of the Consent Decree, the Commission has negotiated with defendants a
stipulation to modify the Consent Decree.
Pursuant to Section 5(m)(3) of the Federal Trade Commission Act, as
amended, 15 U.S.C. § 45(m)(3), the Commission hereby sets forth its
reasons for settlement by entry of a stipulated Modified Consent
Decree:
On the basis of the allegations contained in the Modified Consent
Decree, the Commission believes that the payment of $800,000 in
civil penalties by Telebrands Corporation and Ajit Khubani
constitutes an appropriate amount upon which to base a settlement.
The amount should assure compliance with the law by the defendants
and others who may be in violation. Further, the provisions
requiring defendants (1) to obtain, at their expense, a monitor
with fulfillment expertise to report at least twice to the Court
and the Commission on their success in complying with the Rule and
with the record keeping provisions of the Modified Consent Decree,
and on any additional steps they might take to bring their
operations into compliance, (2) to maintain more detailed records
for a longer time than required by the Consent Decree, and (3) to
monitor the record keeping and Rule compliance of any fulfillment
house retained by them, coupled with an injunction against further
violations of the Rule, constitute effective means to assure the
defendants' future compliance with the law. Additionally, with the
entry of the Modified Consent Decree, the time and expense of
litigation will be avoided.
For the foregoing reasons, the Commission believes that the
settlement by the entry of the attached Stipulation Modifying
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2
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STIPULATION MODIFYING CONSENT DECREE
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EXTRACTED KEY WORDS
CONSENT DECREE TELEBRANDS CORPORATION MERCHANDISE COURT FEDERAL TRADE CIVIL UNITED STATES COMPLIANCE MODIFIED CONSENT DECREE COMPLAINT WESTERN DISTRICT AJIT KHUBANI CONSUMER VIOLATIONS PLAINTIFF OPTION NOTICE CIVIL PENALTY CORPORATE DEFENDANT SUCCESSORS FEDERAL TRADE COMMISSION DELAY OPTION NOTICE ALLEGED VIOLATIONS REQUIRING DEFENDANTS DETAILED RECORDS DOCUMENTING FULFILLMENT HOUSE ENFORCEMENT SEEKING RELIEF VIOLATING PROMPT REFUND |
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
ROANOKE DIVISION
UNITED STATES OF AMERICA, Plaintiff,
v.
TELEBRANDS CORPORATION, a corporation; and, AJIT KHUBANI individually
and as an officer and director of the corporation, Defendants.
Civ. Action No. 96-0827-R
STIPULATION MODIFYING CONSENT DECREE
WHEREAS:
1. On September 18, 1996, plaintiff, the United States of America,
filed a complaint in this Court against defendants, Telebrands
Corporation and Ajit Khubani, seeking relief for alleged violations of
the Federal Trade Commission's Trade Regulation Rule Concerning Mail
or Telephone Merchandise, 16 C.F.R. Part 435 ("Rule").
2. This Court entered a Consent Decree (the "Consent Decree") on
September 23, 1996, requiring defendants to pay a civil penalty,
permanently enjoining the corporate defendant and its successors and
assigns and the individual defendant from violating the Rule, and
requiring them, among other things, to maintain detailed records
documenting their compliance with the Rule.
3. The Consent Decree provides that this Court retains jurisdiction
for the purpose, inter alia, of enabling the parties to apply for
further orders or directions regarding the Consent Decree.
4. Pursuant to the Consent Decree, defendants paid the required civil
penalty.
5. Since entry of the Consent Decree the Federal Trade Commission
("Commission") has determined that it has reason to believe as
follows:
a. At all times material herein, defendants have engaged in mail or
telephone order sales of consumer household products, including
"static" dusters, buckwheat pillows, glider exercise devices,
depilatory devices and novelty watches, in or affecting commerce,
as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C.
44;
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3
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MODIFIED CONSENT DECREE
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EXTRACTED KEY WORDS
CONSENT DECREE TELEBRANDS CORPORATION MERCHANDISE COURT FEDERAL TRADE CIVIL UNITED STATES COMPLIANCE MODIFIED CONSENT DECREE COMPLAINT WESTERN DISTRICT AJIT KHUBANI CONSUMER VIOLATIONS PLAINTIFF OPTION NOTICE CIVIL PENALTY CORPORATE DEFENDANT SUCCESSORS FEDERAL TRADE COMMISSION DELAY OPTION NOTICE ALLEGED VIOLATIONS REQUIRING DEFENDANTS DETAILED RECORDS DOCUMENTING FULFILLMENT HOUSE ENFORCEMENT SEEKING RELIEF VIOLATING PROMPT REFUND |
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
ROANOKE DIVISION
UNITED STATES OF AMERICA, Plaintiff,
v.
TELEBRANDS CORPORATION, a corporation; and, AJIT KHUBANI individually
and as an officer and director of the corporation, Defendants.
Civ. Action No. 96-0827-R
STIPULATION MODIFYING CONSENT DECREE
WHEREAS:
1. On September 18, 1996, plaintiff, the United States of America,
filed a complaint in this Court against defendants, Telebrands
Corporation and Ajit Khubani, seeking relief for alleged violations of
the Federal Trade Commission's Trade Regulation Rule Concerning Mail
or Telephone Merchandise, 16 C.F.R. Part 435 ("Rule").
2. This Court entered a Consent Decree (the "Consent Decree") on
September 23, 1996, requiring defendants to pay a civil penalty,
permanently enjoining the corporate defendant and its successors and
assigns and the individual defendant from violating the Rule, and
requiring them, among other things, to maintain detailed records
documenting their compliance with the Rule.
3. The Consent Decree provides that this Court retains jurisdiction
for the purpose, inter alia, of enabling the parties to apply for
further orders or directions regarding the Consent Decree.
4. Pursuant to the Consent Decree, defendants paid the required civil
penalty.
5. Since entry of the Consent Decree the Federal Trade Commission
("Commission") has determined that it has reason to believe as
follows:
a. At all times material herein, defendants have engaged in mail or
telephone order sales of consumer household products, including
"static" dusters, buckwheat pillows, glider exercise devices,
depilatory devices and novelty watches, in or affecting commerce,
as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C.
44;
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