North Carolina online furniture store owner Henry Ray Privett defrauded 600 consumers of $1.1 million. Privett was sentenced to 14 years in prison after he was found guilty of fraud for a scheme in which consumers purchased furniture that Privett never delivered. New Jersey furniture store owner William C. Neumann was indicted on similar charges under New Jersey state law and was sentenced to five years in state prison.
The owners of Los Angeles-based Cozi Couch Washable Luxury defrauded consumers right here in Santa Monica, leaving a group of more than 20 residents infuriated. One victim, “Marissa,” paid $3,000 in cash for a custom-made couch because the store manager promised to “cut her a deal” if she paid in cash. Having purchased a couch from Cozi Couch several years earlier, Marissa trusted him and jumped at the offer. One year later, Marissa’s living room is still empty. Cozi Couch shut down without delivering the couch to Marissa and many other Cozi Couch victims.
Marissa stated, “As a homeowner and long-time resident of a city like Santa Monica, you hope that you’ll be protected from criminals like the people who run Cozi Couch. Why are they allowed to get away with this?”
Once she realized that she was being defrauded, Marissa informed the store manager of Cozi Couch that she had hired an attorney and planned to file a lawsuit. Cozi Couch then appeared to become highly motivated to deliver her couch. After many phone calls and false promises, Cozi Couch never delivered the couch. Marissa then sued Cozi Couch and its principals. In a surprising ruling, however, a small claims court judge determined that no fraud had occurred. The judge refused to find the owners of Cozi Couch liable.
The Santa Monica City Attorney’s Office has since brought criminal charges of theft, false advertising, and operating without a business license against four former owners and managers of Cozi Couch. Unfortunately, the City Attorney cautioned the victims that although the defendants may be found criminally liable, they likely do not have sufficient personal assets to refund the victims.
Here are some things to keep in mind to protect yourself from consumer predators:
First, avoid paying up front in cash for big purchases. Use your credit card. If any problems occur, you can always contact your credit card company and work with them, instead of with the seller.
Further, take action sooner rather than later. A seller must ship your goods within the time promised. If you and the seller do not discuss a delivery date, the seller must deliver the goods within 30 days. If the seller can not ship within the promised time, the seller must offer you the option of canceling the order and refunding your money. If a business has not timely delivered the product and if you have seen enough red flags to arise suspicion that they will never deliver the goods, demand your money back via a certified letter, and request a receipt of delivery. If the business is reputable, they will make good on their promise, or return your money.
Also, organize with other victims. The victims of the Cozi Couch scheme have created their own e-mail group. They communicate with each other, discuss their cases and give each other helpful pointers on filing lawsuits, and locating the defendants. A group of them even visited the Santa Monica City Attorney’s Office to push for charges to be filed.
Next, take administrative action. For instance, you should file a police report. If you do that, you will assist the prosecutor in building a case and bolster your own civil lawsuit. Also, contact your local prosecutor, just as the Cozi Couch victims have. And file a complaint with the Department of Consumer Affairs.
Moreover, file a lawsuit against the company and the people who run the organization. Although the principals of a corporation are generally insulated from personal liability, if you can show the judge that fraud occurred, a judge should hold both the corporation and the principals liable. You can file a claim for up to $7,500 for only about $50 in your local small claims court.
Additionally, spread the word to potential consumers. Contact the Better Business Bureau and tell them your story. Also, write a review on Web sites such as yelp.com. If you give consumers a reason to not go to the store, they won’t.
Most importantly, trust your gut instinct. If you think you are being defrauded, don’t doubt yourself, you probably are. Take immediate action.
Christie Asselin is an advocate for consumer rights, an attorney and a writer. You may contact her at ChristieAsselinEsq@gmail.com.