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Ohio Settles With Craftmatic Beds

July 26, 2005

Craftmatic • Craftmatic Denies Wrongdoing, Defends Sales Tactics • Senator Prods FTC to Investigate Craftmatic Complaints • Craftmatic Settles Florida Charges • Craftmatic Settles WV Fraud Charges • Ohio Settles With Craftmatic Beds --- • Consumer Complaints

Ohio has entered into a settlement with Craftmatic Organization, Inc., under which the company agreed to reimburse consumers $200,000 based on disputes about the sales practices of Craftmatic and its distributor, J. Kaz Craftmatic Beds.

By entering into this order, Craftmatic and J. Kaz agreed to change many of their business practices in order to operate in compliance with the Ohio Consumer Sales Practices Act.

“My Consumer Protection Section discovered Craftmatic engaged in high-pressure tactics, misleading advertising and claims that the beds would resolve consumers’ medical problems, which were not medically verified,” said Attorney General Jim Petro. “This settlement resolves those issues and my office intends to monitor the company to make sure it continues to comply with Ohio law.”

In a complaint filed in Franklin County Common Pleas Court against Craftmatic Organization, Inc. of Trevose, PA, and J KAZ (doing business as Craftmatic of Pittsburgh), of Verona, PA, the attorney general alleged that the companies engaged in false claims of medical benefits, deceptive price comparisons, false advertising, making false or misleading statements, high pressure sales tactics, Home Solicitation Sales Act violations, deceptive warranty practices, direct solicitation violations, bait-and- switch advertising, failure to disclose material financing terms, failure to disclose material contract terms, illegal attorney fee provision in consumer contracts, and unfair and deceptive and unconscionable business practices.

As a result of this agreement, Craftmatic has agreed to significant changes in its business practices and to let the Attorney General’s Office monitor its business records for the next three years. Craftmatic has agreed to mediate in good faith any further complaints that come to the office.

A total of $225,000 will be paid in increments over the next three years in civil penalties and attorney fees to the state.

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