throbber
Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 1 of 15. PageID #: 1
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF OHIO
`
`
`
`
`
`Case No. ____________
`
`COMPLAINT FOR PERMANENT
`INJUNCTION AND OTHER
`EQUITABLE RELIEF
`
`
`
`
`
`
`
`
`
`
`
`Plaintiff,
`
`v.
`
`
`FEDERAL TRADE COMMISSION,
`
`
`
`
`
`ONE OR MORE UNKNOWN PARTIES
`DECEIVING CONSUMERS INTO MAKING
`PURCHASES THROUGH:
`www.cleanyos.com,
`www.arlysol.com,
`www.broclea.com,
`www.cadclea.com,
`www.cleancate.com,
`www.cleankler.com,
`www.cleanula.com,
`www.clean-sale.com,
`www.clean-sell.com,
`www.clorox-sale.com,
`www.clorox-sales.com,
`www.cloroxstore.com,
`www.crlysol.com,
`www.elysol.com,
`www.littletoke.com,
`www.lybclean.com,
`www.lysoiclean.com,
`www.lysol-clean.com,
`www.lysol-cleaners.com,
`www.lysol-free.com,
`www.lysolsales.com,
`www.lysolservicebest.com,
`www.lysol-sell.com,
`www.lysol-wipe.com, and
`www.thaclean.com,
`
`
`
`
`Defendants.
`
`
`
`
`
`
`
`
`
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 2 of 15. PageID #: 2
`
`
`Plaintiff, the Federal Trade Commission (“FTC”), for its Complaint alleges:
`
`1.
`
`The FTC brings this action under Sections 13(b) and 19 of the Federal Trade
`
`Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b), 57b; and the FTC’s Trade Regulation Rule
`
`Concerning the Sale of Mail, Internet, or Telephone Order Merchandise (“MITOR” or the
`
`“Rule”), 16 C.F.R. Part 435, to obtain temporary, preliminary, and permanent injunctive relief,
`
`rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of
`
`ill-gotten monies, and other equitable relief for Defendants’ acts or practices in violation of
`
`Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and in violation of MITOR, in connection with
`
`their scheme to take consumers’ money in the midst of the current pandemic by deceiving people
`
`into thinking that they are ordering urgently-needed cleaning and disinfecting supplies from
`
`websites owned by or affiliated with the manufacturers of well-known products. Not only are
`
`Defendants unconnected to these manufacturers, they never deliver the products. They take
`
`consumers’ money and disappear.
`
`JURISDICTION AND VENUE
`
`2.
`
`This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a),
`
`and 1345.
`
`3.
`
`Venue is proper in this District under 28 U.S.C. § 1391(b)(2), (b)(3), (c)(2),
`
`(c)(3), and 15 U.S.C. § 53(b).
`
`PLAINTIFF
`
`4.
`
`The FTC is an independent agency of the United States Government created by
`
`statute. 15 U.S.C. §§ 41–58. The FTC enforces Section 5(a) of the FTC Act,
`
`15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce.
`
`
`
`2
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 3 of 15. PageID #: 3
`
`
`The FTC also enforces MITOR, 16 C.F.R. Part 435, which requires mail-, Internet-, or
`
`telephone-based sellers to have a reasonable basis for advertised shipping times, and, when
`
`sellers cannot meet promised shipping times, or in the absence of any promised shipping time,
`
`ship within 30 days, to provide buyers with the option to consent to a delay in shipping or to
`
`cancel their orders and receive a prompt refund.
`
`5.
`
`The FTC is authorized to initiate federal district court proceedings, by its own
`
`attorneys, to enjoin violations of the FTC Act and MITOR, and to secure such equitable relief as
`
`may be appropriate in each case, including rescission or reformation of contracts, restitution, the
`
`refund of monies paid, and the disgorgement of ill-gotten monies. 15 U.S.C. §§ 53(b), 57b, and
`
`16 C.F.R. Part 435.
`
`DEFENDANTS
`
`6.
`
`Defendants’ true identities and addresses are unknown to the Commission at this
`
`time. Through each of the websites identified by name in this Complaint, Defendants have
`
`falsely represented to the public that Defendants have a mailing address in this District at 2180
`
`Barlow Rd., Hudson, OH 44236. Defendants have no true affiliation with that physical address,
`
`but they have listed it repeatedly on their deceptive websites in the course of their scheme.
`
`Defendants transact or have transacted business in this District and throughout the United States.
`
`At all times material to this Complaint, acting alone or in concert with others, Defendants have
`
`advertised or marketed themselves to consumers throughout the United States as sellers of
`
`well-known brands of cleaning and disinfecting products.
`
`
`
`3
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 4 of 15. PageID #: 4
`
`
`
`COMMERCE
`
`7.
`
`At all times material to this Complaint, Defendants have maintained a substantial
`
`course of trade in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act,
`
`15 U.S.C. § 44.
`
`DEFENDANTS’ BUSINESS ACTIVITIES
`
`8.
`
`Since at least July 2020, during the global pandemic, Defendants have been
`
`scamming consumers urgently seeking cleaning and disinfecting products by tricking them into
`
`purchasing such products from Defendants’ counterfeit websites. Specifically, Defendants
`
`purport to sell Clorox and Lysol products. Defendants take consumers’ hard-earned money but
`
`never deliver the products.
`
`9.
`
`To lure consumers, Defendants have used internet search engine, social media,
`
`and pop-up advertisements to bring consumers to their websites to order Clorox and/or Lysol
`
`cleaning and disinfecting products. These products have been in high demand due to the
`
`COVID-19 pandemic, and consumers may have difficulty finding them available for purchase in
`
`their local areas. Defendants have made express references to the pandemic in their marketing.
`
`10.
`
`Defendants’ advertisements take consumers to websites designed to look as if
`
`Defendants are, or are affiliated with, the makers of Clorox or Lysol products. Images A and B,
`
`below, are excerpts from examples of Defendants’ website homepages. Screenshots of
`
`examples of Defendants’ website pages are attached as Exhibit A.
`
`
`
`4
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 5 of 15. PageID #: 5
`
`Image A: www.lysol-wipe.com Home Page
`
`
`
`5
`
`
`
`
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 6 of 15. PageID #: 6
`
`
`
`Image B: www.clorox-sale.com Home Page
`
`11.
`
`Defendants’ counterfeit websites have included, but have not been limited to, the
`
`
`
`following:
`
`a)
`
`b)
`
`www.cleanyos.com,
`
`www.arlysol.com,
`
`
`
`6
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 7 of 15. PageID #: 7
`
`
`
`
`
`c)
`
`d)
`
`e)
`
`f)
`
`g)
`
`h)
`
`i)
`
`j)
`
`k)
`
`l)
`
`www.broclea.com,
`
`www.cadclea.com,
`
`www.cleancate.com,
`
`www.cleankler.com,
`
`www.cleanula.com,
`
`www.clean-sale.com,
`
`www.clean-sell.com,
`
`www.clorox-sale.com,
`
`www.clorox-sales.com,
`
`www.cloroxstore.com,
`
`m)
`
`www.crlysol.com,
`
`n)
`
`o)
`
`p)
`
`q)
`
`r)
`
`s)
`
`t)
`
`u)
`
`v)
`
`w)
`
`x)
`
`www.elysol.com,
`
`www.littletoke.com,
`
`www.lybclean.com,
`
`www.lysoiclean.com,
`
`www.lysol-clean.com,
`
`www.lysol-cleaners.com,
`
`www.lysol-free.com,
`
`www.lysolsales.com,
`
`www.lysolservicebest.com,
`
`www.lysol-sell.com,
`
`www.lysol-wipe.com, and
`
`7
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 8 of 15. PageID #: 8
`
`
`
`y)
`
`www.thaclean.com.
`
`12.
`
`Defendants have used a variety of methods to deceive consumers into thinking
`
`they have accessed an official or approved website affiliated with the makers of Clorox or Lysol,
`
`including using the Lysol or Clorox names and logos on the website homepage and the overall
`
`website design.
`
`13.
`
`In many instances, consumers who have visited Defendants’ websites believed
`
`they were on official websites owned and operated, or otherwise authorized, by The Clorox
`
`Company (“TCC”) or Reckitt Benckiser Group plc (“RB”), the manufacturers of Clorox and
`
`Lysol products, respectively. Many consumers have discovered that they were not dealing with
`
`TCC or RB only after placing orders through the Defendants’ websites and providing Defendants
`
`with their payment information.
`
`14.
`
`In fact, Defendants are not part of, affiliated with, or authorized to sell products
`
`on behalf of TCC or RB. Neither are the Defendants authorized to use the names, logos, or any
`
`other protected content of these well-known businesses.
`
`15.
`
`Defendants’ websites offer for sale a variety of Clorox and Lysol cleaning
`
`products at “special,” “flash sale,” or discount pricing. Defendants encourage consumers to
`
`spend $50 or more by purporting to offer free shipping.
`
`16.
`
`To submit an order through Defendants’ websites, Defendants require the
`
`consumer to provide payment information, such as a credit card number. Defendants
`
`immediately charge the consumer. Consumers report seeing a wide and inconsistent variety of
`
`charging descriptors on their statements when these charges are processed.
`
`
`
`8
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 9 of 15. PageID #: 9
`
`
`
`17.
`
`In numerous instances, consumers have never received the Clorox or Lysol
`
`products they ordered and paid for through Defendants’ websites. In fact, Plaintiff is not aware
`
`of any instance in which Defendants have delivered to any consumer any Lysol or Clorox
`
`products that the consumer ordered. On information and belief, in the aggregate, Defendants
`
`have charged consumers for thousands of unfulfilled orders of Lysol and Clorox products since
`
`July 2020.
`
`18.
`
`After consumers have submitted their orders and payment information, their
`
`experiences have fallen into one of three categories. Consumers report (a) never hearing from
`
`Defendants again, even after attempting to check on their orders by email and/or telephone,
`
`(b) receiving communications from Defendants with falsified or fictitious delivery information
`
`about a purported shipment that never arrives, or (c) receiving some shipment from Defendants
`
`of a worthless product that the consumer did not order, such as a pair of socks.
`
`19.
`
`In numerous instances, consumers have reported that when they have attempted to
`
`go back to Defendants’ websites to check on order status they have discovered that the websites
`
`no longer exist. Although Defendants’ websites have routinely disappeared in a matter of days
`
`or weeks, Defendants have continued to perpetrate their scheme using new websites with
`
`different URLs but essentially the same design, format, and content.
`
`20.
`
`In numerous instances, consumers have attempted to follow established
`
`procedures to obtain chargebacks or refunds through the institutions that provide the payment
`
`accounts through which they paid Defendants. However, in numerous instances, Defendants’
`
`use of falsified shipment information has frustrated consumers’ efforts to use these mechanisms.
`
`When consumers have presented their claims through these procedures, Defendants have
`
`
`
`9
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 10 of 15. PageID #: 10
`
`
`deceptively represented that they fulfilled consumers’ orders. As purported evidence that they
`
`have fulfilled consumers’ orders, Defendants have provided evidence of actual shipments that
`
`have been unrelated to the consumers at all or that reflect only Defendants’ shipments of
`
`worthless or incorrect items to consumers. In numerous instances, these deceptive tactics have
`
`led institutions to deny consumers’ requests for chargebacks or refunds.
`
`21.
`
`Based on the facts and violations of law alleged in this Complaint, the FTC has
`
`reason to believe that Defendants are violating or are about to violate laws enforced by the
`
`Commission.
`
`VIOLATIONS OF THE FTC ACT
`
`22.
`
`Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or deceptive acts
`
`or practices in or affecting commerce.”
`
`23. Misrepresentations or deceptive omissions of material fact constitute deceptive
`
`acts or practices prohibited by Section 5(a) of the FTC Act.
`
`Count I
`
`Misrepresentations to Induce Payments for Cleaning Supplies
`
`24.
`
`In numerous instances in connection with the advertising, marketing, promotion,
`
`or offering for sale of cleaning supplies branded as Clorox or Lysol products, including through
`
`the means described in Paragraphs 8-20, Defendants induce consumers to make payments to
`
`Defendants by representing, directly or indirectly, expressly or by implication: (a) that
`
`Defendants are part of, affiliated with, or authorized to sell products on behalf of The Clorox
`
`Company and/or Reckitt Benckiser Group plc, and (b) that Defendants will deliver the products
`
`consumers order from Defendants’ websites.
`
`
`
`10
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 11 of 15. PageID #: 11
`
`
`
`25.
`
`In truth and in fact, Defendants (a) are not part of, affiliated with, or authorized to
`
`sell products on behalf of The Clorox Company and/or Reckitt Benckiser Group plc, and
`
`(b) have failed to deliver to consumers the products that consumers have ordered from
`
`Defendants’ websites.
`
`26.
`
`Therefore, the making of the representations as set forth in Paragraph 24
`
`constitutes a deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C.
`
`§ 45(a).
`
`VIOLATIONS OF THE MAIL, INTERNET, OR TELEPHONE ORDER
`MERCHANDISE RULE
`
`27. MITOR, 16 C.F.R. Part 435, prohibits sellers from soliciting any order for the sale
`
`of merchandise ordered through the mail, via the Internet or by telephone “unless, at the time of
`
`the solicitation, the seller has a reasonable basis to expect that it will be able to ship any ordered
`
`merchandise to the buyer” either “[w]ithin that time clearly and conspicuously stated in any such
`
`solicitation; or [i]f no time is clearly and conspicuously stated, within thirty (30) days after
`
`receipt of a properly completed order from the buyer.” 16 C.F.R. § 435.2(a)(1).
`
`28.
`
`“Receipt of a properly completed order” means “where the buyer tenders full or
`
`partial payment … the time at which a seller receives both said payment and an order from the
`
`buyer containing all of the information needed by the seller to process and ship the order.” 16
`
`C.F.R. § 435.1(c).
`
`29.
`
`“Shipment” means the act of physically placing the merchandise in the possession
`
`of a carrier. 16 C.F.R. § 435.1(e).
`
`
`
`11
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 12 of 15. PageID #: 12
`
`
`
`30. Where a seller is unable to ship merchandise within the time stated in the
`
`solicitation or within 30 days, if no time is given, the seller must offer to the buyer “clearly and
`
`conspicuously and without prior demand, an option either to consent to a delay in shipping or to
`
`cancel the buyer’s order and receive a prompt refund.” 16 C.F.R. § 435.2(b)(1).
`
`a)
`
`Any such offer “shall be made within a reasonable time after the seller
`
`first becomes aware of its inability to ship,” but in no event later than the time
`
`stated or within 30 days if no time is stated. 16 C.F.R. § 435.2(b)(1).
`
`b)
`
`The offer must fully inform the buyer of the buyer’s right to cancel and
`
`provide a definite revised shipping date or inform the buyer that the seller cannot
`
`make any representation regarding the length of the delay. 16 C.F.R.
`
`§ 435.2(b)(1)(i).
`
`31.
`
`A seller must “deem an order cancelled and… make a prompt refund to the buyer
`
`whenever the seller receives, prior to the time of shipment, notification from the buyer cancelling
`
`the order pursuant to any option [under MITOR] … [or] [t]he seller fails to offer the option [to
`
`consent to a delay or cancel required by § 435.2(b)(1)] and has not shipped the merchandise”
`
`within the time required by MITOR. 16 C.F.R. § 435.2(c), (c)(1), and (c)(5).
`
`32.
`
`Pursuant to Section 18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), and 16 C.F.R.
`
`Part 435.2 a violation of the Rule constitutes an unfair or deceptive act or practice in violation of
`
`Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
`
`33.
`
`In numerous instances, when the Defendants:
`
`Count II
`
`
`
`12
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 13 of 15. PageID #: 13
`
`
`
`a)
`
` represent they will ship purchased goods, they do not have a reasonable
`
`basis to expect to ship the goods within the timeframes they promise or within 30
`
`days;
`
`b)
`
`fail to ship orders within the timeframe required by MITOR, they also fail
`
`to offer customers the opportunity to consent to a delay in shipping or to cancel
`
`their order and receive a prompt refund;
`
`c)
`
`fail to ship orders within the timeframe required by MITOR and fail to
`
`offer consumers the opportunity to consent to a delay in shipping or to cancel
`
`their order, they do not cancel those orders or provide consumers a prompt refund;
`
`d)
`
`receive cancellation and refund requests from consumers pursuant to any
`
`option under MITOR, they do not deem those orders cancelled or provide a
`
`prompt refund.
`
`34.
`
`Defendants’ practices as alleged in Paragraph 33 violate MITOR, 16 C.F.R.
`
`§ 435.2(a), (b), and (c), and therefore are unfair or deceptive acts or practices in violation of
`
`Section 5 of the FTC Act, 15 U.S.C. § 45(a).
`
`CONSUMER INJURY
`
`35.
`
`Consumers are suffering, have suffered, and will continue to suffer substantial
`
`injury as a result of Defendants’ violations of the FTC Act and MITOR. In addition,
`
`Defendants have been unjustly enriched as a result of their unlawful acts or practices. Absent
`
`injunctive relief by this Court, Defendants are likely to continue to injure consumers, reap unjust
`
`enrichment, and harm the public interest.
`
`
`
`13
`
`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 14 of 15. PageID #: 14
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`
`
`THIS COURT’S POWER TO GRANT RELIEF
`
`36.
`
`Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to grant
`
`injunctive and such other relief as the Court may deem appropriate to halt and redress violations
`
`of any provision of law enforced by the FTC. The Court, in the exercise of its equitable
`
`jurisdiction, may award ancillary relief, including rescission or reformation of contracts,
`
`restitution, the refund of monies paid, and the disgorgement of ill-gotten monies, to prevent and
`
`remedy any violation of any provision of law enforced by the FTC.
`
`37.
`
`Section 19 of the FTC Act, 15 U.S.C. § 57b, and MITOR authorize this Court to
`
`grant such relief as the Court finds necessary to redress injury to consumers resulting from
`
`Defendants’ violations of MITOR, including the rescission or reformation of contracts and the
`
`refund of money.
`
`PRAYER FOR RELIEF
`
`
`
`Wherefore, Plaintiff FTC, pursuant to Sections 13(b) and 19 of the FTC Act, 15 U.S.C.
`
`§§ 53(b), 57(b), MITOR, and the Court’s own equitable powers, requests that the Court:
`
`A.
`
`Award Plaintiff such preliminary injunctive and ancillary relief as may be
`
`necessary to avert the likelihood of consumer injury during the pendency of this action and to
`
`preserve the possibility of effective final relief, including temporary and preliminary injunctions
`
`and an order freezing assets;
`
`B.
`
`Enter a permanent injunction to prevent future violations of the FTC Act and
`
`MITOR by Defendants;
`
`
`
`14
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`

`

`Case: 5:20-cv-02494-SL Doc #: 1 Filed: 11/04/20 15 of 15. PageID #: 15
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`
`
`C.
`
`Award such relief as the Court finds necessary to redress injury to consumers
`
`resulting from Defendants’ violations of the FTC Act and MITOR, rescission or reformation of
`
`contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten monies; and
`
`D.
`
`Award Plaintiff the costs of bringing this action, as well as such other and
`
`additional relief as the Court may determine to be just and proper.
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`Dated: November 4, 2020
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`Respectfully submitted,
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`ALDEN F. ABBOTT
`General Counsel
`
`s/Harris A. Senturia
`Harris A. Senturia (OH 0062480)
`Fil M. de Banate (OH 0086039)
`Adrienne M. Jenkins (OH 0089568)
`Federal Trade Commission
`1111 Superior Avenue East, Suite 200
`Cleveland, Ohio 44114
`Telephone: (216) 263-3420 (Senturia)
`Telephone: (216) 263-3413 (de Banate)
`Telephone: (216) 263-3411 (Jenkins)
`Facsimile: (216) 263-3426
`hsenturia@ftc.gov
`fdebanate@ftc.gov
`ajenkins@ftc.gov
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`Attorneys for Plaintiff
`FEDERAL TRADE COMMISSION
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`15
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`

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