Local News in Brief : Firm Settles Fraud Suit
A Culver City telemarketing firm has agreed to pay $40,000 in civil penalties and make restitution to settle a fraud suit brought by the state.
Colonial Corp.’s sales staff sold items such as key chains and bumper stickers by telling buyers they had won an expensive prize but had to make a purchase to get the gift, Deputy Atty. Gen. Jerry Smilowitz said. Requiring such a purchase is illegal in California.
The sales people, Smilowitz said, falsely told customers they were working with First Lady Nancy Reagan or Colonial Penn Insurance Co., which has no affiliation with the business. The prize consumers usually received was an inexpensive emerald, and although the firm told buyers they could get a refund if they did not like the products or prizes, no refunds were sent, Smilowitz said.
In agreeing to sign the stipulated settlement in Los Angeles Superior Court Tuesday, the firm and its officers admitted no wrongdoing.
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