Markets Wired

At the request of the Federal Trade Commission, a federal judge has ordered two persons to pay more than $49 million for their role in a Canada-based scheme that duped American businesses into paying for business directories and listings they did not order.

Bernard Fromstein and Judy Provencher are the remaining defendants in the Datacom Marketing, Inc. case, which was part of an international effort against cross-border fraud. (See press release dated May 23, 2006) Unlike their co-defendants, the pair did not agree to settlements of the charges against them.

Under a default judgment entered against Fromstein and Provencher on May 7, they are barred from misrepresenting that consumers have a preexisting business relationship, that consumers have agreed to purchase business directories or listings in directories, or that consumers owe money for business directories or listings in directories. They are also barred from violating the Telemarketing Sales Rule, and from misrepresenting, or failing to disclose, any fact material to a consumer’s decision to purchase or use any product or service. In addition, during outbound telephone calls, they are barred from failing to disclose the seller’s identity, the call’s purpose is to sell goods or services, and the nature of the goods or services.

The order bars the pair from selling, renting, or otherwise disclosing personal information about anyone whose information was obtained in their scheme, and from benefiting from that information. They are also barred from collecting payment for any business directory or listing on accounts established before the order was issued. The order also waives all of their rights to approximately $470,000 worth of uncashed checks from consumers.

The order includes a $49,235,402 judgment against Fromstein and Provencher for consumer injury, as well as record-keeping provisions to allow the FTC to monitor compliance with the court’s order.

This case was brought with the assistance of the United States Postal Inspection Service, Canada’s Competition Bureau in Vancouver, British Columbia, the Service de Police de la Ville de Montréal, and the Toronto Strategic Partnership. The Toronto Strategic Partnership consists
of the FTC, Competition Bureau Canada, the Toronto Police Service Fraud Squad, the U.S. Postal Inspection Service, the Ontario Ministry of Government Services, the Ontario Provincial Police Anti-Rackets Section, the Royal Canadian Mounted Police, and the United Kingdom’s Office of Fair Trading.

The order for permanent injunction and final default judgment was entered in the U.S. District Court for the Northern District of Illinois, Eastern Division.

Copies of the order are available from the FTC’s Web site at http://www.ftc.gov and 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 in English or Spanish 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 http://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 more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad.