St. Petersburg Times Online: Business

Weather | Sports | Forums | Comics | Classifieds | Calendar | Movies

Kane's accused of false advertising

The furniture store first refuses a settlement by the Attorney's General Office, then sues that same agency.

By J. NEALY-BROWN, Times Staff Writer

© St. Petersburg Times, published July 10, 2002


The furniture store first refuses a settlement by the Attorney's General Office, then sues that same agency.

Arthur Whalley saw exactly the leather recliner that he and his wife were looking for in a flier that Kane's Furniture mailed to them. It even showed the easy chair in the color they wanted.

And it was advertised as on sale.

But when the Palm Harbor couple went to the chain's Clearwater store, they say they were told that it was not on sale after all.

"I was so flaming mad when I walked out of their store because they had sent us a flier and the flier said, 'Every item on sale,' etc. etc.," Whalley said Tuesday. In fact, he was so mad that he filed a complaint with the Pinellas County Consumer Protection Agency against the Pinellas Park company in January 2001.

A year later, the Florida Attorney General's Office launched an investigation based on complaints like Whalley's and nearly 300 others.

"This is the largest batch of complaints against a furniture store in nine years of doing this kind of work," said Assistant Attorney General Jacqueline Dowd.

The company also has an unsatisfactory rating with the Better Business Bureau of West Florida because of complaints about poor customer service and delivery of defective furniture.

When it launched its investigation in January, the Attorney General's Office accused Kane's of making misrepresentations in ads, delivering incomplete orders, making credit errors, having a pattern of delivering defective furniture and providing inadequate customer service.

The Attorney General's Office prepared a settlement in which Kane's would pay $400,000 and agree to not falsely advertise sale items, respond to customers' complaints immediately or refund their money, implement a system to track customer service requests and hire a customer service manager.

But Kane's -- which has 14 stores, including three Savon's Furniture stores, in west and central Florida -- is fighting back.

Not only did executives at Kane's refuse to accept the settlement, they sued the Attorney General in Pinellas-Pasco Circuit Court for exceeding its authority, alleging that the settlement terms would give Kane's competitors an unfair advantage. A hearing is set for next month in Clearwater.

"The Attorney General wanted things that we couldn't give in to," said Marion Hale, an attorney for Kane's. "They wanted to essentially micromanage the business. Those are not issues that we can really let the Attorney General dictate." The company's executives did not respond to a request for comment.

Later this month, both sides also are scheduled to appear before a judge to settle a dispute over a subpoena for company records that Kane's is fighting on the ground that it is broad and "unduly burdensome."

If Kane's had accepted the settlement, it would have been the second time. The Attorney General did a sweeping investigation of furniture stores across the state in the mid 1990s.

As a result, in 1995, Kane's Furniture signed an agreement with the Attorney General barring it from advertising prices as discounts unless they were lower than the bona fide price. The company also paid an $80,000 fine. Burdines was fined $100,000 in that dispute, the largest penalty at the time.

The bulk of complaints filed with the Better Business Bureau revolve around Orlando stores, and the business-backed consumer agency said most of the complaints it received have been resolved. Of the 226 complaints about Kane's in the past three years, only 37 are unresolved, according to the bureau.

At the Pinellas County Consumer Protection Agency, 29 complaints against Kane's have been filed in the last three years. The majority of them were resolved by a refund, repair or making some sort of adjustment. Three cases, all filed this year, still are open.

And the Pinellas agency's files indicate the company has had a customer complaint manager since at least 2001.

Hale, the attorney for Kane's, said, "There's only six (complaints directly) to us. And each of those six we got back to them and explained to them how they had been resolved or how they were not valid to begin with."

Of the 120,000 deliveries the company makes a year, "we're talking an infinitesimal number of complaints," Hale said.

-- Information from the Orlando Sentinel was used in this report. J. Nealy-Brown can be reached at nealy@sptimes.com or at (727) 893-8846.

Rejected settlement

Under the settlement proposal that Kane's refused, the Florida Attorney General's Office proposed that the furniture chain:

Advertise a sale item only when the price is lower than the everyday price.

Respond to customer complaints immediately or offer a full refund.

Deliver orders that are complete and without defects or immediately offer a full refund.

Implement a system to track customer service complaints.

Hire a customer service manager to investigate and respond to complaints within 14 days.

© Copyright, St. Petersburg Times. All rights reserved.