Trucking firms tricked – and it wasn’t a Halloween prank

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With only two weeks until Halloween, people are starting to think about their costumes. A pirate, a witch, a Jedi knight – or an enforcement official from the U.S. Department of Transportation? According to an FTC lawsuit, that’s the disguise a Florida-based operation used to take in more than $19 million from small businesses. If you have clients that work in regulated industries – commercial trucking, for example – the case sounds the alarm about a form of “trick or cheat” imposter deception that may have them in the headlights.

People who own and operate certain kinds of commercial vehicles must register annually with the Unified Carrier Registration (UCR) system or their state government and pay a fee based on their fleet size. In addition, every two years, some of those businesses have to file a Motor Carrier Identification Report, which can be done for free on the DOT’s Federal Motor Carrier Safety Administration website.

According to the FTC, the defendants sent threatening emails, official-sounding robocalls, and alarming texts, claiming to be with the “Compliance Unit” of “DOT Authority” or “UCR Registration.” The communications warned businesses that “enforcement is in progress” or “enforcement will begin shortly,” and could result in $1,100 a day in “civil penalties.” (For example, one email used the header, “THIS NOTICE WILL CONTINUE TO BE SENT BY THE SYSTEM UNTIL OPENED: NOTICE OF CURRENT & PAST UCR ENFORCEMENT THROUGH ROADSIDE INSPECTIONS & AUDITS.”) The messages urged companies to call a telephone number with Washington’s 202 area code – although none of the defendants’ operations are DC-based – that was answered with a recording for “the UCRCompliance.com Information Line.”

How did many small businesses respond? According to the complaint, exactly as the imposters had hoped. Rather than directing businesses to legitimate government sites, the defendants sent them to their own online look-alike registration services. Convinced they were dealing with government officials and faced imminent law enforcement action, business people ponied up hefty fees – often hundreds of dollars more than what government agencies require.

The FTC alleges the defendants used a similar barrage of deceptive threats to get people to pay $25 to file their biennial Motor Carrier Identification Report, a service that DOT offers for free. 

It didn’t end there. Once people used the defendants’ system to pay their UCR fees, they were enrolled – without their knowledge or consent – in “SafeRenew,” the defendants’ automatic renewal program. To stop the unauthorized negative option charge, people had to affirmatively cancel the subscription by September 30th of that year, important details the FTC says the defendants buried on their webpage.

At the FTC’s request, a federal judge in Florida entered a preliminary injunction against James P. Lamb, Uliana Bogash, DOTAuthority.com, DOTFilings.com, and related companies. Even at this early stage, the case suggests three messages to convey to your clients.

Avoid an affiliation misrepresentation.  Claiming a bogus affiliation with a government agency or program is likely to attract law enforcement attention. Avoid flat-out falsehoods, as well as images or implications that suggest an official connection.

Review the rules of ROSCA.  In addition to other alleged misrepresentations, the complaint charges that the defendants violated the Restore Online Shoppers’ Confidence Act. ROSCA bans online negative options unless the seller: 1) clearly and conspicuously discloses all materials terms of the deal before obtaining a consumer’s billing information; 2) gets the consumer’s express informed consent before making the charge; and 3) provides a simple mechanism for stopping recurring charges. Are you up on what ROSCA requires?

Help your clients spot a possible imposter scam.  Whether it’s a robocall falsely claiming to be from the IRS or a bogus threat of lawsuits and fines, imposter deception can take many forms. Warn your clients about tactics that target small businesses. Local, state, and federal agencies are aware of imposter scams and understand a business owner’s need to double-check before assuming a message really is from a government office.

 

Comments

I am glad they caught them but unfortunately the justice system is so BAD that the Trucking companies will never see their monies back and they will probably just get a slap on the wrist. Similar to Patraeus and Clinton. Our federal government is so wrought with redundant rules, regulations, incompetency and fraud. Trucking companies and their drivers are so stressed by the DOT. The other problem is the changing of weight and speed without addressing and changing the tires and suspension.

I'm in Kansas and just fell for this very scam last week! Is there any action being taken currently that I can add my evidence to?

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