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Consumer News Release

For immediate release -- Monday, February 14, 2000.
Contact Bob Brammer -- 515-281-6699

Attorney General Takes Action on Online Auction Complaints

Des Moines -- Iowa Attorney General Tom Miller took action today against two Iowans who sold products through Internet online auctions but failed to provide the merchandise to buyers. Miller also urged buyers to pay by credit card or an escrow agent to protect themselves if they use online auctions.

The Consumer Protection Division simultaneously filed civil lawsuits and consent judgments today in Polk County District Court involving Daniel Schnathorst of Norwalk and Karen Striley of Clinton. The two separate suits alleged that Schnathorst and Striley sold items through Internet auctions but in some cases failed to deliver the merchandise.

In the consent judgments, Schnathorst and Striley were ordered to reimburse purchasers and pay court costs, and they were enjoined from further violations of the Iowa Consumer Fraud Act. If they violate the injunction, the defendants face a civil penalty of up to $5,000 per day per violation.

The Consumer Protection Division said Striley sold but failed to deliver merchandise including rattan chests, candle holders and bookends, and Schnathorst sold camera lenses and electronic music speakers.

"We intend to ensure that Iowa doesn't become a host state for Internet auction fraud," Miller said. "Online auction sellers obviously have a legal obligation to provide merchandise they sell."

The two Iowa cases were part of a nationwide enforcement effort involving the Federal Trade Commission, other State Attorneys General, federal prosecutors, local prosecutors in other states, and the US Postal Administration. "We want to uphold the integrity of online auction commerce," Miller said.

"We also urge Iowans to try to pay by credit card, use an escrow agent, or pay by COD if they shop at online auctions," he said. "That protects you in case you don't receive the merchandise, or if it is not what was represented in the auction." Miller also urged online auction buyers to verify the seller's identity, address and telephone, and to ask about return policies or arrangements for follow-up service.

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