A U.S. district court in Washington State has awarded the Federal Trade Commission $7.5 million against two Canadian companies and an individual accused of deceiving U.S. businesses and organizations into paying for unordered business directories and listings.
The court also permanently banned the defendants from selling business directories or listings to U.S. residents. In addition, the court ordered the defendants to return uncashed checks totaling over $140,000 to approximately 300 consumers.
The complaint alleged the defendants then sent an invoice for the business directory purchase, which no one had in fact authorized. If the business or organization did not pay the invoice, the bill was referred to an in-house collection company that hounded the company.
The court entered a summary judgment order against 9125-8954 Quebec Inc., doing business as Global Management Solutions; 9125-8947 Quebec Inc, doing business as Commutel Marketing and Marketing USA and Ty Nguyen.
The order requires them to pay $7,578,186 and forfeit all rights to all frozen assets, including the uncashed checks and $40,000 from a frozen merchant account the defendants used to process credit card payments. The order also permanently bans the defendants from selling business directories or listings to U.S. residents.
The FTC also has reached settlements with Byron Steczko and Cory Kornelson, former presidents of two of the corporate defendants, who agreed to permanent bans on selling business directories or listings to U.S. residents. Phong Anh Vo, president of another former corporate defendant, also entered into a settlement with the FTC.
In addition, the settlement orders entered a $3,819,481 judgment against Steczko, a $2,086,482 judgment against Kornelson, and a $1,618,268 judgment against Vo. All of the judgments are suspended based on the defendants’ inability to pay.
The orders also prohibit the defendants from misrepresenting any material fact about a any good or service, or any material fact about the terms, conditions, or limitations of any refund or guarantee policy.
In addition, the orders require that in outbound calls, the defendants disclose promptly and conspicuously the identity of the seller, that the purpose of the call is to sell goods or services, and the nature of the goods or services. The defendants must disclose in a clear and conspicuous manner all material terms, conditions, and limitations of any refund or guarantee policy or any policy of non-refundability.
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