FTC Fines Stamp Firm $10 Million

The Federal Trade Commission barred an Orange County stamp collection firm and a related company in Indiana from misrepresenting information to investors and ordered it to pay a $10-million fine.

The FTC reached a settlement with World Wide Classics Inc. and World Wide Classics of Indiana Inc. on charges that the two firms misrepresented to investors the value of the stamp collections they sold by up to 10 times the true value.

The settlement requires the companies to pay the $10-million fine to the FTC through a liquidation of corporate assets. The FTC will use the proceeds from liquidation to pay creditors and will also try to reimburse consumers for losses.

It was unclear whether the companies can continue to operate. But Ronald T. Schaefer, past president and current chairman of the firms, is required to post a $200,000 performance bond before resuming any telemarketing activities.

Based on complaints in June, 1992, the FTC alleged that the companies, Schaefer and others sold stamps by representing the investments as low-risk, yet charged far higher prices for the stamps than average retail value. They sold the collections through investment seminars, telemarketing and TV commercials.

Two other officers, Christopher de Jesus and Janet Alexander, previously settled charges.