This is National Small Business Week, a time to celebrate and recognize America's small business entrepreneurs, and to remind America's small businesses how to defend themselves against business-to-business fraud. In connection with National Small Business Week, the Federal Trade Commission announces a settlement with one defendant, Scott Earl, who was involved in an alleged business-to-business office toner supply fraud. In addition, as part of the FTC's efforts to protect small businesses, the Commission has initiated a new grassroots business education campaign known as Project BOSS (Banish Office Supply Scams).
The Commission sued National Supply & Distribution Center, Inc., Data Distribution Service, Inc., Steven Rayman, Larry Ellis, Lee Siegel and Scott Earl as part of "Operation Misprint," a December 1999 multi-agency law enforcement effort to crack down on bogus office and maintenance supply telemarketing schemes targeting large and small businesses and nonprofit organizations. The FTC's complaint alleged that the defendants deceptively marketed exorbitantly priced toner for office copy machines in violation of the FTC Act and the Telemarketing Sales Rule. Defendant Scott Earl has agreed to a settlement involving his role in the deceptive scheme. Under the terms of the settlement, Earl is banned from engaging or participating in telemarketing, or assisting others who are engaged or participating in telemarketing. The settlement also prohibits him from engaging in any of the deceptive practices alleged in the complaint, in connection with the advertising, promotion, offering for sale or sale of any good or service. In addition, Earl is prohibited from selling National Supply or Data Distribution's customer lists. The settlement includes a $2,000,000 "avalanche judgment" clause, to be paid if the court finds that Earl misrepresented his financial condition.
The FTC announced Project BOSS at a Senate Small Business Committee hearing in March 2000. In October 1999, the Commission appeared before the same Committee to testify about Web site cramming. The Commission testified at both hearings that business education is one of the most powerful tools to prevent fraud.
As part of its consumer education drive, the FTC has prepared some tips for small businesses to avoid being scammed by fraudulent office supply telemarketers and others:
Some of the common schemes that prey upon small businesses and nonprofit organizations include:
Visit www.ftc.gov/bcp/edu/microsites/supplies/ for more information about Project BOSS and other scams targeting small businesses.
Copies of the legal documents in the National Supply & Distribution matter will be available shortly. Copies of news releases pertaining to other office supply scam cases 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; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710
(National Supply & Distribution -- Civil Action No. CV-99-12828 HLH (AJWx))