As a result of Attorney General Schneiderman’s investigation, York has paid $10,000 in civil penalties to the State and forfeited $500.00 to the Town of Henrietta for the application it was required to obtain.
“This settlement should serve as a warning to businesses out there that attempt to deceive and manipulate the public,” said Attorney General Schneiderman. “Business owners who use dishonest practices will be held fully accountable.”
On July 12, York began advertising a 5-day, going-out-of-business sale in the Town of Henrietta and the surrounding regions. The advertisements stated that there was a “WAREHOUSE CLOSING,” that “all stock is limited to quantities on hand,” and that “all sales are final.”
York held the sale throughout July. The Town of Henrietta notified the Attorney General’s Office that York Home failed to obtain a license to conduct the sale, violating New York State’s General Business Law. The Attorney General issued a Cease and Desist letter at York modified its advertisements to reflect the true nature of the sale “Warehouse Sale” and “Warehouse Consolidation Sale.”
Under New York Law, businesses must obtain a license to conduct a Going out of business type sale which includes a warehouse closing sale. The law was enacted to prevent business from deceiving about the circumstances for a sale that lead consumers to believe that the business is selling the reaming goods on hand for sacrifice prices because a company is closing.
The Attorney General’s investigation found that York did not intend to close its warehouse but simply reduce its size and rent out unneeded space. York took orders for new furniture from customers and received shipments of the furniture after it began the sale. Stock was therefore not “limited to quantities on hand,” making the advertisements false statements in violation of New York State’s General Business Law. Also, the sale continued long after the 5 days advertised and extended its “Warehouse Consolidation Sale” for 3 months, more than enough time to reduce the inventory on hand at the start of the sale.
The agreement, known as an Assurance of Discontinuance, was signed by York. The company agreed to end the sale and cease the deceptive practices.
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