FTC bans Net auctioneer

An online auctioneer who allegedly took bids on computers but never delivered them is banned for life from doing business on the Net.

3 min read
An online auctioneer who allegedly took bids on computers but never delivered them has been banned from doing business on the Net for the rest of his life, federal regulators said today.

The Federal Trade Commission said it has reached an agreement with the operator of Experienced Designed Computers and C&H Computer Services that he will never use the Net again to advertise, market, or sell goods or services.

In April, See related special feature: 
A look at the FTC the FTC filed a complaint against Craig Lee (Danny) Hare of Lake Worth, Florida, and a federal court ordered him to halt operation on the Net. The agency accused the Internet merchant of taking bids on PCs for as much as $1,450 from about 30 people, and then collecting the money but failing to ship the merchandise. Hare has not admitted to any wrongdoing.

The settlement still must be approved by the U.S. District Court for the Southern District of Florida, where the case was filed.

With the onslaught of e-commerce, the FTC has conducted a slew of stings to bust the operators of online pyramid schemes, deceptive business offers, and the infamous Moldova modem scam. In that case, visitors of various adult entertainment Web sites racked up hefty phone bills after they were quietly disconnected from their Internet service providers and had their calls rerouted through Moldova, a republic in the former Soviet Union.

Online auction sites such as eBay have sparked other controversies over legal liability and disclosure issues as well. Brick-and-mortar auction houses are regulated by states, and in many cases must disclose any liens on the property being sold, take responsibility for any misleading or untruthful statements about a product, or give customers a refund within 24 hours after returning a product to the auction company.

Hare is the first person the FTC has exiled from Net commerce, but the agency has used the same tactic to stop accused scammers who used direct mail or telemarketing.

"This is not a new remedy," said Betsy Broder, assistant director of the FTC's division of marketing practices.

"Someone offering a product and failing to send it is nothing new. We are seeing everything we saw in direct mail and telemarketing fraud," she added. "But when it's on the Net and becomes available to tens of thousands of people around the world, then you have a new type of challenge."

The settlement also bars Hare from sending commercial offers through email.

Stephanie Herter also agreed to a settlement with the FTC. Hare deposited the checks he received from online bidders into Herter's bank account. Under the agreement, she will turn that money over to the FTC to refund consumers.

If Hare does pop up on the Net again pitching goods and services, the FTC will likely ask law enforcement officials to bring criminal charges against him.

"They would be in contempt of court," Broder said, "and if they violate the agreement and we would seek action.

"We require the defendant to keep us apprised of future employment and his home address," she noted.