Peter C. Harvey, Attorney General

Division of Consumer Affairs
Reni Erdos, Director

NEWARK - New Jersey is suing the principal of a Burlington County company that specialized in selling products designed to educate hearing-impaired children, alleging she accepted payments from consumers for items sold through her company, but failed to deliver the ordered products to consumers as promised and as required by law, Attorney General Peter C. Harvey and Consumer Affairs Director Reni Erdos said today.

The State's four-count complaint against Kathryn A. Phillips of Mount Laurel alleges she violated the New Jersey Consumer Fraud Act and State regulations governing deceptive mail order practices while selling products geared toward the hearing-impaired, such as signing puppets, signing videos, books and flash cards. Phillips is the president, officer and/or director of Sign-Along Communications Inc., of Mount Laurel. Sign-Along is also named as a defendant in the State's complaint.

In an attempt to sell Sign-Along products, the complaint alleges, Phillips advertised over the Internet, in mail order catalogs and in the Silent News newspaper. In addition, she sold Sign-Along merchandise to consumers at conventions, bazaars and conferences at such locations as the Pennsylvania Registry for the Deaf and the Pennsylvania School for the Deaf.

The complaint alleges that between March 1998 and November 2000, Phillips accepted orders and payments from consumers, but repeatedly failed to deliver merchandise, despite her assurances that the products would be mailed out or had already been sent to the consumer.

"Ms. Phillips' assurances were nothing more than empty promises," Attorney General Harvey said. "Consumers who placed orders held up their end of the agreement when they paid their money. Unfortunately, the defendant did not do her part. Instead, she left consumers without the products they ordered and the money they paid for the merchandise."

"We're alleging that Ms. Phillips took consumers' money and left them dangling on the hope that she would make good on her promises and send the products for which they already paid," Director Erdos said.

Under New Jersey's regulations governing deceptive mail order practices, it is unlawful for a person who conducts a mail order or catalog business to accept money for merchandise ordered by mail, telephone, facsimile transmission or electronic mail and then permit six weeks to elapse without either:

• delivering or mailing the merchandise order;
  
• making a full refund;
  
• sending the consumer a letter or notice advising them of the duration of an expected delay or the substitution of merchandise of equivalent or superior quality, and offering to send a refund within one week, if requested; or
  
• sending the consumer substituted merchandise of equivalent or superior quality.

Yet, the defendants failed to meet the requirements under the law.

The State's complaint also alleges that the defendants:

• accepted consumers' checks and credit card payments and failed to offer them refunds when the defendants knew or should have known that consumers were not going to receive their merchandise;
  
  
• misrepresented to consumers, via a recorded telephone message, that "we will make good on any orders" and instructed consumers to leave their name and phone number to facilitate same, when, in fact, many consumers never received their merchandise;
  
  
• misrepresented to consumers, via a recorded telephone message, that certain puppets were mailed to consumers and would arrive in time for Christmas, when, in fact, consumers did not receive the items;
  
  
• misrepresented to a consumer, via telephone, that she would receive her merchandise, when, in fact, she did not;
  
  
• misrepresented to consumers, via catalog, that "our website will make communicating with us very easy," when, in fact, many consumers never received responses to their e-mail inquiries about the status of their orders; and
  
  
• misrepresented to a consumer, at a convention, that her shirt would be delivered "real soon," when, in fact, the consumer never received her shirt.

In addition to requiring the defendants to pay restitution, the State's suit seeks to have them pay civil monetary penalties and costs.

Deputy Attorney General Sharon Hussong Moscato of the Division of Law is handling this matter for the State.