Company That Posed as a Legitimate Reference Agency Settles FTC Charges

A for-profit company operating out of Grand Prairie, Texas, and its owners, have agreed to settle federal charges that they defrauded consumers by posing as a reference agency that provided non-biased and accurate information about its member companies. The Federal Trade Commission had alleged that rather than offering independent and reliable information, the defendants essentially were shills for their fraudulent business opportunity members, who were primarily vending machine business opportunity sellers. As part of the proposed settlement, Affiliated Vendors Association, Inc., and its owners are permanently banned from receiving any compensation or remuneration in exchange for serving as a reference.

The FTC filed its complaint against Affiliated Vendors Association, Inc., doing business as AVA and North American Business Registry, and Maurice and Joyce Billion as part of the "Operation Dialing for Deception" law enforcement sweep announced on April 15, 2002. According to the complaint, the defendants allegedly ran a sham Better Business Bureau-type organization that gave consumers glowing reports about its members. AVA members allegedly paid the company for pitching their businesses to consumers over the phone. The company never told consumers of its connection to the sellers and misrepresented the support and services that its members would provide to business opportunity purchasers.

To settle the charges, the defendants permanently are banned from receiving any compensation or remuneration in exchange for serving as a reference, and from using the names "Affiliated Vendors Association, Inc.," "North American Business Registry," or any variation of either. The defendants also are prohibited from making any false or misleading statements in connection with any business that reports information on a franchise, business opportunity, or business venture to consumers, and from assisting others engaged in reporting information on a franchise, business opportunity, or business venture to consumers. In addition, the order contains a $400,000 judgment against the defendants, which is suspended based on the defendants' financial information. The entire amount will become due if the court finds that the defendants made any material misrepresentations about their financial situation.

The Commission vote to authorize staff to file the stipulated final judgment and order was 5-0. The stipulated final judgment and order was filed in the U.S. District Court for the Northern District of Texas, in Dallas, on July 24, 2002, and entered by the judge on July 25, 2002. The FTC's East Central Region - Cleveland handled this litigation.

NOTE: This stipulated final judgment and order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Final judgments have the force of law when signed by the judge.

Copies of the stipulated final judgment and order are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at https://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC Matter No. X020043)

Contact Information

Media Contact:
Brenda Mack,
Office of Public Affairs
202-326-2182
Staff Contact:
Dana Barragate or Larissa Bungo
FTC East Central Region - Cleveland
216-263-3402