Carolina Furniture, Inc. Used Deceptive Advertisements And Failed To Obtain License For Sale; Will Pay $30k Penalty

Schneiderman: We Will Fight To Ensure That All New York Businesses Play By The Rules

Attorney General Eric T. Schneiderman recenty announced a settlement with Carolina Furniture, Inc., a business that sells furniture and home furnishings. An investigation of a “store closing sale” by the NYAG showed that Carolina Furniture made deceptive representations in its advertisements and failed to obtain a proper license before the sale. Pursuant to the agreement, Carolina Furniture will be required to comply with New York law and pay a penalty of $30,000.

“It is against the law for businesses to make false promises to get customers in the door,” Attorney General Schneiderman said. “My office will keep fighting to ensure that all companies doing business in New York play by the rules.”

In February 2014, Whole Foods bought out the lease for a retail location Carolina Furniture had at the Northtown Plaza, a large retail center located at the Sheridan Drive-Niagara Falls Boulevard nexus in Amherst. Carolina Furniture, which had 3 retails stores, decided to operate a “store closing sale” at all three of its retail locations. The store closing sale began on August 24, 2015 and continued for about 3 months concluding on or around “Black Friday,” November 27, 2015.

Carolina Furniture advertised its store closing extensively and made many representations about the sale that the NYAG found deceptive. Examples are given below:

• All of the advertisements stated that Carolina Furniture was conducting a “$3,000,000 Furniture Liquidation” and that “Everything Must Go.” These claims were not true. Carolina Furniture was not being compelled to liquidate its merchandise and it never anticipated doing do.
• Carolina Furniture sent out a letter to 40,000 consumers inviting them to a a “PRIVATE SALE HELD 4 DAYS ONLY!”. This claim was not true. All 3 retail locations were open to the public during the “private sale.”
• Carolina Furniture stated that it was selling merchandise for the “LOWEST PRICE EVER OFFERED!” and it was offering “UNHEARD OF DISCOUNTS” at the “BIGGEST SALE in our HISTORY!” This claim was not true.The pricing formula used by Carolina Furniture during the sale was the same pricing formula it had used since 1995.
• Carolina Furniture sent out coupons that it said was solely for the preferred customers “which was not going to be available to the general public during that time.” This claim is not true. Not only did Carolina Furniture offer the same coupon in later advertisements, Carolina Furniture employees distributed the advertisement to consumers who came into the retail establishments during the sale and those consumers could avail themselves of the coupon.

In addition to its deceptive advertisements, Carolina Furniture did not first obtain a license to conduct the sale as required by GBL § 582. Nor did Carolina Furniture, after it obtained a license, conspicuously show on the face of its advertisements and announcements of the sale the number of the license and the date of its expiration as required by GBL § 589. Last, the length of the sale violated GBL § 590 which limits the duration of a store closing sale to 60 days.

This case was handled by Assistant Attorney General James M. Morrissey, Karen Davis, Senior Consumer Fraud Representative, Ken Peters, Supervising Investigator, and Jennifer Hill, Investigator in the Buffalo Regional Office. The Buffalo Regional Office is led by Assistant Attorney General In Charge Michael Russo. The Division of Regional Offices is led by Executive Deputy Attorney General for Regional Affairs Marty Mack.