The Federal Trade Commission has charged two separate office supply operations with scams targeting small businesses and nonprofit organizations and tricking them into paying for office and cleaning supplies they never ordered.
At the FTC’s request, federal courts in California and Maryland have temporarily halted and frozen the assets of the two operations.
In the California case, the FTC alleges that Telstar Consulting Inc. (also doing business as United Business Supply) called the consumers to offer supposed deals on, or free samples of, items such as art supplies and cleaning products.
They also asked consumers to accept an additional shipment by falsely calling it a “backorder” that was supposedly part of an order the consumer had already paid for, and then billed them for the “backorder.”
In other instances, the defendants claimed consumers had agreed to multiple shipments, when at most they had agreed to only one shipment.
In addition, in instances in which consumers agreed to make a purchase, the defendants allegedly failed to disclose the total cost and quantity of goods, and the terms of the sale.
In the Maryland case, which includes multiple defendants, the FTC charges that telemarketers from Lighting X-Change Company LLC falsely indicated that they had done business with the consumers earlier and that they were offering a free sample or catalog, without properly disclosing that they were making a sales call.
The person who processed the invoices was often not the same person who received the shipments and did not know the merchandise had not been ordered.
Those who paid became targets for future shipments of unordered merchandise and invoices seeking payment.
In both cases, the defendants are charged with violating the FTC Act, the Telemarketing Sales Rule, and the Unordered Merchandise Statute by shipping and billing for unordered merchandise.
The FTC urges business owners to learn the telltale signs of five common scams that target small and medium-sized businesses and nonprofits.