Telestar Consulting, Inc.

Also known as: United Business Supply, Kleritec.

The FTC alleged that Telestar billed child care centers, schools, and police and fire departments for office supplies they never ordered, then threatened collections when they questioned the invoices. It paid a $7 million judgment.

1Official action

$7MRedress ordered

3Business names used

Resolved. Refunded, settled, ceased operating, or the claim did not hold up. Kept for the record.

Identity

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Registrations: FTC v. Telestar Consulting Inc. and Karl Wesley Angel (FTC case 152-3204, C.D. Cal., order entered 2017)
Jurisdictions: United States (federal)

Who this targeted

Child care centers, schools, and police and fire departments. Organizations with small back offices, where an invoice for supplies is plausible and someone will often just pay it.

Telestar Consulting and its owner Karl Wesley Angel offered an initial shipment presented either as free or as a low-cost “good deal.” If the recipient agreed to buy, the defendants did not disclose the total cost, quantity or terms of the sale.

The company then sent additional shipments nobody had agreed to, while representing that the recipient had agreed. When people challenged the invoices or did not pay promptly, the defendants threatened to send them to “collections.” Those who paid, believing they had to, often received still more unordered merchandise and more bills.

As the FTC’s Acting Chairman put it: “Billing for unordered merchandise is against the law, and small businesses like those affected here are under no obligation to return or pay for items they did not order.”

The order

Telestar and Angel are banned from telemarketing nondurable office, cleaning, educational and art supplies; from sending merchandise without prior consent unless it is clearly marked as a free sample; from billing for products without prior consent; and from violating the Unordered Merchandise Statute. They may not claim a recipient is obligated to pay, that goods are part of a prior order, or that someone agreed to multiple shipments.

The judgment is $7 million, payable to the FTC within one year, with $1.6 million due within seven days. In March 2020 the FTC mailed 13,181 checks averaging $525, totaling more than $6.9 million.

The Better Business Bureau serving Los Angeles and Silicon Valley assisted.

What is not established

A stipulated final order resolves the allegations without any admission or finding of wrongdoing.

Sources

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