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AG Nessel Files Class Action Lawsuit Against Mississippi Man and Drop-Shipping LLC, Alleging Illegal Business Practices
January 26, 2024
LANSING – This week, Michigan Attorney General Dana Nessel served a class action lawsuit upon a Mississippi man and his limited liability company (LLC) AF LLC, operating as ACF Wholesale, alleging statutory conversion and other illegal business practices in violation of the Michigan Consumer Protection Act (MCPA). The lawsuit was filed in the 30th Circuit Court in Ingham County.
Benjamin Moody, of Columbus, MS, sells furniture via ACF Wholesale as a drop-shipping model business. A drop-shipper acts only as an intermediary between a customer and a manufacturer, typically another retailer or wholesaler, who ships the product directly to the buyer. The typical drop-shipper is positioned between the customer and supplier, does not maintain a stock of merchandise, places orders to suppliers after items are ordered from their storefront, charges in excess of the price they pay for the merchandise as profit, and never sees or handles the products they sell. Drop-shipping itself is not illegal, but potential pitfalls exist for both buyers and sellers, and the Attorney General has previously issued a consumer alert advising residents on precautions to take when purchasing from such operations.
In November of 2023, the Department of Attorney General received dozens of Michigan consumer complaints from the Better Business Bureau (BBB) against ACF Wholesale dating from mid-2020 to 2023. The BBB website details approximately 2,000 complaints against the company over that period of time, more than half filed in the last year. The complaints demonstrate a clear pattern showing ACF Wholesale taking orders and payment for furniture and failing to deliver the product, fabricating excuses for delay and non-delivery, and in many instances failing to provide refunds despite promises to do so. BBB complaints from Michigan cover every region of the state.
In December of 2023, the Attorney General sent ACF Wholesale and Moody a Notice of Intended Action, requesting documentation identifying all Michigan consumers still owed refunds and the amounts owed to each. This was never provided. The Department of Attorney General was meanwhile contacting BBB complainants to identify such Michigan consumers. The lawsuit specifically seeks monetary damages for individual customers in Suttons Bay, Norton Shores, and Midland who have been denied refunds for undelivered furniture purchases in the amounts of $281, $624, and $1,153 respectively.
ACF Wholesale’s website is presently not operational, though no legal barrier prevents the company from soliciting future purchases from Michigan consumers.
“When a business completely fails to deliver products, and further abandons refund requests, my department will continue to rise to the defense of Michigan consumers,” said Nessel. “ACF Wholesale still wrongfully holds thousands of dollars, maybe more, owed back to the people of our state and others. I strongly encourage any Michigan residents who have been harmed by this company to file a complaint with my consumer protection team. We know there are more victims out there and we want to help.”
The Attorney General alleges unlawful violations of four distinct subsections of the MCPA, including “failing, in a consumer transaction that is rescinded, canceled, or otherwise terminated...to promptly restore to the person or persons entitled to it a deposit, down payment, or other payment.” Additionally alleged is statutory conversion, based on failing to return money for canceled orders.
The Attorney General’s complaint seeks as relief:
- an order finding Moody and his LLC jointly and severally liable;
- an award of monetary damages to the three specified complainants, as well as, all similarly situated Michigan consumers;
- injunctions prohibiting ACF from engaging in further transactions with Michigan consumers;
- injunctions against Moody and any entity he creates, owns, or manages from engaging in business with Michigan consumers; and
- civil fines, and enforcement costs and fees.
Concerning the class action status, the lawsuit claims, “The class of consumers to which these claims relate consists of all Michigan consumers who have placed and paid for orders with ACF Wholesale for goods that were not delivered, and who did not receive a refund.”
Any Michiganders who have been similarly treated by Moody and ACF Wholesale and have not filed complaints with the BBB are strongly encouraged to file complaints with the Department of Attorney General’s Consumer Protection Team. Furthermore, Michigan consumers who believe they have been defrauded by any drop-shipper, or suspect they are the victims of illegal or predatory business practices, are encouraged likewise.