FTC stops company’s alleged office supply scam

A federal court has temporarily frozen the assets of a company that the Federal Trade Commissions says conned millions of dollars from nonprofit organizations and small businesses through an office supply scam.

Here’s how the scam worked.

Liberty Supply Company, which also did business as Omni services, told businesses and charitable organizations they were going out of business. They then offered pens, paper clips and other office supplies at low prices. The FTC complaint alleges that the business quoted a per-unit price even though they only sold multi-unit quantities, causing customers to believe the quoted price applied to a package of items, instead of an individual item.

Liberty Supply Company did not tell its customers how much the final price was or the shipping cost, even when asked.

For example, if a church asked  for a purchase order for their organization to approve, the business sent unordered merchandise and an invoice.

But the business didn’t stop there. The company would aggressively try to get their customers to pay for the unordered merchandise. Once all payments were made, a free gift, more unordered merchandise and an invoice were sent again.

Liberty Supply Co., Mia McCrary and John B. Hart, are charged with violating the FTC Act, the Telemarketing Sales Rule, and the Unordered Merchandise Statute. The FTC complaint also names Nor-Jay Enterprises Inc. as a relief defendant who profited from the scheme.