Attorney General Salazar Sues General Steel For Deceptive Sales Of Steel Buildings
Denver—Attorney General Ken Salazar announced today that his office has filed a consumer protection lawsuit in Jefferson County District Court against General Steel, a Lakewood, Colorado, company, as well as the company’s president, three managers, and a top salesperson, for alleged deceptive advertising and sales of manufactured steel buildings. The State alleges that through their deceptive advertising and marketing tactics, General Steel sold hundreds of buildings ranging from $10,000 to $100,000 to numerous ranchers, farmers, churches, and other consumers.
Named in the lawsuit are General Steel Domestic Sales, LLC dba General Steel, General Steel Industries, LLC dba Capital Steel, Jeffrey Wayne Knight, president and CEO of General Steel, Kevin Neal Kissire, general manager for General Steel, managers Bruce Graham and Jordan Blum, and salesman Jeffrey Scott Donelson.
The lawsuit alleges that beginning in 1997, General Steel passed itself off as a manufacturer of buildings and falsely advertised factory-direct clearance sales. The company used numerous deceptive marketing schemes to sell expensive manufactured steel buildings to consumers in Colorado and throughout the United States.
“Consumers looking to make a large purchase must be able to rely upon truthful advertising and accurate sales information, and businesses have no right to use false and deceptive claims in order to make a sale,” Attorney General Salazar said. “The use of abusive sales practices at the expense of honest customers and business competitors is unacceptable in Colorado.”
The lawsuit alleges that General Steel used a combination of national radio, television, direct mail, and other Internet advertising and deceptive telephone sales scripts to sell their buildings. The lawsuit alleges that consumers who called General Steel’s office in response to the advertisements were purposely misled to believe General Steel was a factory or manufacturer of steel buildings, and that some number of previously purchased unclaimed buildings had become available. As explained to consumers by salespeople pretending to be employees of the shipping or production department, a limited number of buildings had become available because of cancelled orders, and that sale-priced “clearance” buildings were available because of unusual circumstances. The sales scripts authorized by the president and managers encouraged such misrepresentations.
The Attorney General’s lawsuit seeks a court order providing refunds to its purchasers, civil penalties of up to $2,000 per violation of the Consumer Protection Act and attorney fees and costs. The lawsuit also seeks a preliminary and permanent injunction preventing defendants from engaging in any future false and deceptive advertising of their merchandise.
The lawsuit alleges more specifically that defendants advertised pre-constructed steel buildings with a toll-free number for consumers to call. General Steel’s salespeople were instructed to pretend that they were not salespeople but were instead from shipping or production or some other department consistent with a manufacturing plan. General Steel’s agents answering the telephone would ask questions about the customer’s building needs and would lead the caller to believe that the "agent" was aware of a clearance building originally purchased by someone else who had cancelled their contract, and that the building may be available at a substantially discounted price. The salespeople would further create a false sense of urgency by claiming that other consumers were considering the same discounted buildings and that in order to get an incredibly discounted price on the leftover buildings, the consumer needed to place a deposit or risk losing the opportunity. The lawsuit further alleges that General Steel did not sell clearance buildings, that excess inventory did not exist, that General Steel is not a manufacturer, and that it is actually a middleman distributor that must order buildings from other manufacturers.
The Attorney General’s office initiated an investigation of this matter in 2003 after receiving numerous consumer complaints from the Colorado BBB, the media, and from law enforcement offices in other states.
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Denver—Attorney General Ken Salazar announced today that his office has filed a consumer protection lawsuit in Jefferson County District Court against General Steel, a Lakewood, Colorado, company, as well as the company’s president, three managers, and a top salesperson, for alleged deceptive advertising and sales of manufactured steel buildings. The State alleges that through their deceptive advertising and marketing tactics, General Steel sold hundreds of buildings ranging from $10,000 to $100,000 to numerous ranchers, farmers, churches, and other consumers.
Named in the lawsuit are General Steel Domestic Sales, LLC dba General Steel, General Steel Industries, LLC dba Capital Steel, Jeffrey Wayne Knight, president and CEO of General Steel, Kevin Neal Kissire, general manager for General Steel, managers Bruce Graham and Jordan Blum, and salesman Jeffrey Scott Donelson.
The lawsuit alleges that beginning in 1997, General Steel passed itself off as a manufacturer of buildings and falsely advertised factory-direct clearance sales. The company used numerous deceptive marketing schemes to sell expensive manufactured steel buildings to consumers in Colorado and throughout the United States.
“Consumers looking to make a large purchase must be able to rely upon truthful advertising and accurate sales information, and businesses have no right to use false and deceptive claims in order to make a sale,” Attorney General Salazar said. “The use of abusive sales practices at the expense of honest customers and business competitors is unacceptable in Colorado.”
The lawsuit alleges that General Steel used a combination of national radio, television, direct mail, and other Internet advertising and deceptive telephone sales scripts to sell their buildings. The lawsuit alleges that consumers who called General Steel’s office in response to the advertisements were purposely misled to believe General Steel was a factory or manufacturer of steel buildings, and that some number of previously purchased unclaimed buildings had become available. As explained to consumers by salespeople pretending to be employees of the shipping or production department, a limited number of buildings had become available because of cancelled orders, and that sale-priced “clearance” buildings were available because of unusual circumstances. The sales scripts authorized by the president and managers encouraged such misrepresentations.
The Attorney General’s lawsuit seeks a court order providing refunds to its purchasers, civil penalties of up to $2,000 per violation of the Consumer Protection Act and attorney fees and costs. The lawsuit also seeks a preliminary and permanent injunction preventing defendants from engaging in any future false and deceptive advertising of their merchandise.
The lawsuit alleges more specifically that defendants advertised pre-constructed steel buildings with a toll-free number for consumers to call. General Steel’s salespeople were instructed to pretend that they were not salespeople but were instead from shipping or production or some other department consistent with a manufacturing plan. General Steel’s agents answering the telephone would ask questions about the customer’s building needs and would lead the caller to believe that the "agent" was aware of a clearance building originally purchased by someone else who had cancelled their contract, and that the building may be available at a substantially discounted price. The salespeople would further create a false sense of urgency by claiming that other consumers were considering the same discounted buildings and that in order to get an incredibly discounted price on the leftover buildings, the consumer needed to place a deposit or risk losing the opportunity. The lawsuit further alleges that General Steel did not sell clearance buildings, that excess inventory did not exist, that General Steel is not a manufacturer, and that it is actually a middleman distributor that must order buildings from other manufacturers.
The Attorney General’s office initiated an investigation of this matter in 2003 after receiving numerous consumer complaints from the Colorado BBB, the media, and from law enforcement offices in other states.
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