Area Firms Accused of Scam
Federal regulators sued a dozen companies Thursday, half of them based in the Southland, accusing them of operating office-supply schemes in which thousands of small businesses, charities and schools were billed for products they did not want.
Thursday’s sweep, dubbed Operation Misprint, was meant to raise awareness about business-to-business telemarketing fraud, they said.
The cases, including one involving a Laguna Hills firm, started innocuously enough: with cold calls from telemarketers hawking office supplies such as toner cartridges, lightbulbs or urinal deodorizers, the Federal Trade Commission said in cases filed in California, Tennessee and Illinois federal courts.
Sometimes, the callers misrepresented themselves as existing contractors updating computer records, the FTC said.
Once the telemarketers extracted enough information to complete believable invoices, they began sending products--and bills--to their involuntary clients, regulators said. When some clients refused to pay up, they received notices from collection agencies.
“Consumers get confused and afraid,” said Randy Brook, the FTC’s senior attorney in Seattle. “The question becomes how far your billing department will go to fight this. They may just take the merchandise and pay the bill.”
Most purchasers received used or imitation products, often at inflated prices, the FTC said.
FTC officials said they had filed complaints against the following Southland companies: Business Services Center Inc. of Laguna Hills; International Business Network Inc. of Tarzana; Central Data Supply of Reseda; National Supply & Distribution Center Inc. of Canoga Park; General Supply Centers Inc. of Northridge; and Continental Business Systems, also known as United Products, of Huntington Park.
The lawsuits seek consumer refunds, Brook said. Central Data has agreed to a restraining order that limits what it can offer in its telemarketing pitches. In the other cases, federal regulators have had the companies turned over temporarily to receivers, Brook said.
