Companies Charged With Fraud Agree to Cease Telemarketing

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Three companies have agreed to cease telemarketing activities as part of a settlement of fraud charges filed by the Federal Trade Commission.


Federal Data Service Inc., Margate, FL, agreed to stop all telemarketing activities until it pays a performance bond of $100,000. Also, National Supply & Distribution Center Inc. and Data Distribution Services Inc., both of Canoga Park, CA, agreed to a permanent ban from telemarketing activities.


A search of telephone directories in Canoga Park, CA, and Margate, FL, revealed no listings for the three companies.


Federal Data Service, which was charged in U.S. District Court in Fort Lauderdale, FL, also agreed to pay $800,000 to reimburse consumers who purchased the company's services. According to the FTC, the company made false claims when it sold lists of entry-level U.S. Postal Service positions and federal wildlife jobs for $46 to $80 each via a toll-free number.


The company was accused of falsely promising a full refund for consumers who did not obtain positions. Federal Data Service also charged consumers' credit cards and checking accounts without their consent, the FTC said.


National Supply & Distribution Center and Data Distribution Services -- two companies run by the same three principals -- were named in a 1999 FTC lawsuit that was filed as a result of Operation Misprint, an investigation targeting fraudulent telemarketers that provided office supplies. The charges were filed in U.S. District Court in Los Angeles.


According to the FTC, the two companies called businesses and offered printer toner at bargain prices. The telemarketers would contact an employee of a business and falsely claim to be the regular supplier of toner for the business, the FTC said.


After the employee agreed to a purchase, the telemarketers would send the toner and charge what the FTC described as an exorbitant price. Businesses that bought toner were told there were no refunds. However, companies that attempted to return the toner were informed that they had to pay a 15 percent restocking fee, the FTC said.


In addition to the telemarketing ban, the companies' three principals agreed to pay $655,000 to refund the businesses that purchased toner.
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