LANSING — Michigan Attorney General Dana Nessel announced her office is investigating two related Grand Rapids businesses — Blvck Pods, LLC and BlcvkedPods, LLC, which sell wireless earphones and earbuds online.
The two Michigan companies have been the subject of numerous complaints from consumers around the world who believed they were buying “100 percent custom and unique” products produced and shipped from Grand Rapids. In reality the companies’ operators were running a drop-shipping business by taking orders and relying on a Chinese company to fulfill them, which never arrived or arrived in non-working condition. The businesses also allegedly failed to promptly refund their customers, a press release said.
After reviewing complaints from the Better Business Bureau, information publicly available online and media stories recounting consumer experiences, Nessel’s Corporate Oversight Division filed an ex parte petition from investigative subpoenas against the two companies in Kent County Circuit Court, seeking documents and testimony.
“Drop-shipping is a variation on the all-too-familiar theme of duping and bilking consumers,” Nessel said. “With this investigation, my office is taking the first step toward stamping out illegal activities in this new and growing online arena.”
Drop-shipping business have become prevalent in recent years. Sellers set up a website and sell products they do not keep in stock. When an order is place, the seller sends it to a third party who ships the goods directly to the buyer. The practice is not illegal in Michigan, but it creates much room for problems and abuse according to Nessel.
The ex parte petition filed last week includes numerous factual allegations demonstrating that the attorney general has probable cause to believe the companies have engaged and continue to engage in deceptive activities that violate Michigan’s Consumer Protection Act.
An educational consumer alert site titled “Drop-Shipping: What You Need to Know Before You Buy or Sell Online” is available on the Michigan.gov website.