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Better Business Bureau ®
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Wisconsin
BBB, FTC Investigation Results in Federal Court Action
August 04, 2014

Better Business Bureau hopes this announcement by the Federal Trade Commission sends a strong message that deceptive business practices will not be tolerated. It was one day shy of eleven years since BBB first published a Business Review on Midway Industries LLC , when the FTC entered a temporary restraining order against Midway and other associated companies on July 21.

"This is a triumph for ethical businesses everywhere," said Ran Hoth, president and CEO, BBB Serving Wisconsin. "Hardworking small businesses, non-profits and churches across the country endured pressure and hardship when faced with costly bills for unauthorized supplies. But BBB never gave up and was grateful for the opportunity to help investigate and bring this case with the FTC."

According to today's announcement by the FTC, "a federal court has temporarily halted and frozen the assets of an operation that bilked nonprofits, businesses, and municipalities out of millions of dollars by deceptively sending them overpriced light bulbs and cleaning supplies that they never ordered. The FTC seeks to permanently stop the illegal practices and make the defendants return victims' money."

Midway Industries LLC, et. al. have an F rating with BBB. In the last three years, BBB received over 500 complaints against the companies. A review performed by BBB in December 2012 on the complaints filed against Midway found a pattern of misleading sales practices alleging:

  • Organizations received unordered merchandise.
  • 'Orders' were placed under the names of individuals who were unauthorized to make a purchasing decision and/or with an invalid Purchasing Order number.
  • Sales calls were disguised to 'verify an order' and/or imply a previous purchasing relationship, when no previous order or relationship existed.
  • Sales calls offered gifts or promotional items in exchange for contact information and/or agreement to join a mailing list. Later, unordered merchandise and invoices were received.
  • Invoices for unauthorized items exceeded market value.
  • Complainants had difficulty returning the unordered products.

For more information on the FTC's complaint, go to www.ftc.gov