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Manufacturer Comes to the Rescue of One Kids Quarters Customer

No such luck for other customers of bankrupt furniture retailer

By Lisa Wade McCormick
ConsumerAffairs.com

April 25, 2008

Kids Quarters • Manufacturer Comes to the Rescue of One Kids Quarters Customer • Little Satisfaction for Kids Quarters Customers • Bankrupt Kids Quarters Takes on a New Identity • Online Furniture Purchase Goes Sour • Consumer Complaints --- • More about furniture ...

There's good news today for a single mom who lost thousands of dollars to a now-defunct furniture store in Florida.

The company that manufacturers the loft bed she ordered for her 12-year-old daughter is giving her the furniture – free of charge.

"I'm so thrilled," said Maxine J. of Palmyra, Virginia. "This is so awesome."

As we reported earlier, Maxine sent payments on her daughter's furniture for 18-months to a company called Kids Quarters, Inc. She sent $500 some months; $200 other months.

"I tried to send in something every month," Maxine said. Her daughter also did extra chores to help pay for her "dream bedroom set."

In December, Maxine sent Kids Quarters the final payment on her daughter's $2,952.79 full-size loft bed.

"We were so anticipating this bed," Maxine said. "My daughter kept a picture of this set on her wall for one year and six months, patiently -- and at times toward the end -- impatiently waiting for this final payment and delivery."

Maxine called Kids Quarters in February to check on the bed's delivery. That one call dashed her daughter's dream – and Maxine's bank account.

"The company told us we would not get our order," she said. "They told me they were going bankrupt. They said I should tell my credit card company that I was scammed and get them to reimburse my money."

Maxine, however, didn't pay for the bed with a credit card. She made monthly payments to Kids Quarters with her debit card, which offers no protection when companies fail to deliver the merchandise promised.

Sleeping on the floor

"I know I'm not going to get my money back," Maxine told us in March. "My daughter and I are heartbroken. She's still sleeping on a couple of twin mattresses on the floor."

Those sleeping arrangements, however, will soon change – thanks to Berg Furniture. That's the manufacturer of the bed Maxine ordered for her daughter.

Almog Lieber, vice-president of marketing for Berg Furniture, told ConsumerAffairs.com that his company is giving Maxine the loft bed -- for free.

"The world is not as nice as we would like it to be," he told us. "It's not as pretty as we'd like it to be, and sometimes life is nasty. But, as I told Maxine, I don't think her daughter should have to learn that at such an early age."

Lieber said Maxine should receive the bed in three to four weeks. The only additional cost she may incur is the price of set-up and delivery.

"Unfortunately, we can't afford to do this for more people," Lieber said, adding his company didn't receive the money customers like Maxine paid Kids Quarters for their furniture. "I wish I could. In the scheme of everything, what we're doing is small, but it's something…it's something we can do to maybe create a better world."

Berg previously agreed to honor all Kids Quarters' contracts. Specifically, the company said it would make and ship the furniture for the same price customers paid Kids Quarters.

As we've reported, hundreds of consumers nationwide paid Kids Quarters for furniture they never received.

One of those consumers included a reporter for ConsumerAffairs.com. She paid Kids Quarters $1,600 last August and never received her son's loft bed.

Our reporter -- who used a credit card to pay for the furniture -- later ordered the bed directly from Berg. It arrived on April 3 – three weeks after she placed the order.

But many consumers paid for their furniture with cash or debit cards. They're now out thousands of dollars.

And it appears unlikely that they'll receive their money or their furniture.

Kids Quarters' president, Antonio Sola, closed the company's three stores in Florida -- and its division -- in early March. Kids Quarters is now filing for bankruptcy.

ConsumerAffairs.com learned the Orlando-based law firm of www.schlegelcaplan.com Schlegel Caplan is representing Kids Quarters in the bankruptcy action.

Meanwhile, complaints about Kids Quarters continue to rise.

The Florida Attorney General's Office has received 56 complaints about Kids Quarters -- most of those involve delivery problems and failure to issue refunds. A spokeswoman said her office is not investigating the company "at this time."

We've learned that the Better Business Bureau of Central Florida has received at least 143 complaints about Kids Quarters. ConsumerAffairs.com has also received scores of complaints about the company.

Not ready to give up

Many consumers say they'll continue to fight for their money – or their furniture. They've talked about hiring an attorney. They've filed complaints with the Florida Attorney General's office and other consumer protection agencies. They've also promised to continue warning others about Kids Quarters.

"I don't know if any of us will get any money back," Valerie said, "but be assured we're ready to fight. There's power in numbers!"

However, consumers should be aware that when a company files for bankruptcy, creditors -- including customers -- are seldom able to collect more than a small fraction of what they are owed.

"Sadly, there's not always strength in numbers," said one attorney. "The most realistic course of action is to file a claim with the bankruptcy court and hope for the best. It's probably not worth spending time and money pursuing litigation that's not likely to go anywhere."

"The lesson here is to avoid layaway plans. Use a credit card or pay cash for major purchases," the attorney said.

A grateful Maxine says she'll keep fighting for other consumers.

"I'm so thrilled by what Mr. Lieber and Berg have done for me. I was speechless when Mr. Lieber called to tell me he was sending me the bed. It was very nice of him. And I've promised to let others know what he's done for me and my daughter.

"But I'm not giving up the fight to help everyone else here who lost money and expose these people," she said. "I know there's still some dirt going on (with Kids Quarters) and I want to help everyone get to the bottom of it and get compensated."

Consumers who paid Kids Quarters for furniture they didn't receive can file complaints with the following agencies:

• Florida Attorney General's office Florida Department of Agriculture and Consumer Services
• Better Business Bureau of Central Florida
• Orange County Consumer Fraud Unit
• The Better Business Bureau of Central Florida

The Florida Attorney General's office is also referring consumers who bought their furniture online to the Internet Crime Complaint Center.

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