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State accuses Kane's of deceptive practices
By JEFF HARRINGTON, Times Staff Writer
The Florida attorney general's office has filed a civil suit against Kane's Furniture, culminating a yearlong investigation into hundreds of consumer complaints lodged against the Pinellas Park retailer. The suit, filed Monday in state circuit court in Orlando, details a pattern of alleged deceptive practices at Kane's, including false advertising, delivery of broken and defective furniture, failure to respond to complaints, sale of worthless warranties, refusal to refund deposits and false charges to credit accounts. "It is by far, by far, the most complaints we've ever received about a retail business," said Jacqueline Dowd, an assistant attorney general with the economic crimes unit in Orlando. About 370 complaints were analyzed for the suit but the list of disgruntled customers runs into the thousands, based on documents recently obtained by the state. The new batch of complaints, now being investigated, involve problems with credit card billings. World Financial Network National Bank, an Ohio company that handles Kane's store credit card program, was subpoenaed by the Florida Attorney General for information about the retailer. "They sent us recently three giant boxes, each one the size of a file drawer," full of customer complaints about credit card charges, Dowd said. "There are thousands of them in these boxes," she said, adding that she is unsure how many of the complaints may be duplicative. Kane's, a private retailer with 14 stores in west and central Florida, including three Savon's Furniture stores, objected to the state's complaint. "Kane's vehemently denies the allegations in the complaint and looks forward to its day in court when its name will be cleared," said Marion Hale, an attorney for Kane's. Kane's chief executive Irwin Novack is being sued both as an officer of the company and personally based on state allegations that he controlled and directed the unfair practices. The suit charges that Kane's "routinely" delivered defective furniture. Among the problems were couches missing legs or cushions, dining room chairs that didn't fit under dining room tables, and other furniture with split seams and staples sticking out through the fabric. "Many of the consumers have complaints about multiple problems," Dowd said. "They had defective furniture and also a billing problem. Or they had a warranty problem. There are multiple violations here." The suit is the latest episode in a battle with Kane's that stretches back to 1995. That year, Kane's was part of a group of furniture retailers fined for misleading advertising practices. Burdines was held up as the poster child of the probe; Kane's wound up paying $80,000, the second-largest fine. But the Kane's customer service problems persisted. The company has an unsatisfactory rating with the Better Business Bureau of West Florida because of the level of complaints. Last year, the state launched another investigation, delving into fresh reports of misrepresentations in ads, delivery of incomplete orders, credit errors, and otherwise poor 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 rejected the settlement and sued the state alleging intimidation and coercion. Pinellas Circuit Judge W. Douglas Baird dismissed Kane's suit but the company has appealed. Because of the growing list of documented complaints, an unfavorable decision in the latest suit could wind up costing Kane's much more than the $400,000 settlement it had rejected. Each complaint of unfair business practices could cost Kane's up to $10,000, or up to $15,000 if it involves an elderly or disabled person. In addition to any fine, the state is seeking another $500,000 from the company to make whole the initial 370 disputed claims. -- Information from Times files was used in this report. Jeff Harrington can be reached at harrington@sptimes.com or (813) 226-3407.
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From the Times Business report
From the AP
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