Three Canadian companies that sold business directories and office supplies agreed to a ban on telemarketing the products in a settlement with the Federal Trade Commission, the FTC announced yesterday.
Hanson Publications, Quebec Inc. and Associated Merchant Paper Supplies had telemarketing operations in Quebec and Ontario, the FTC said. The companies persuaded customers to buy products by misleading them into thinking that a fellow worker had previously made a purchase, according to the FTC.
Associated Merchant Paper Supplies also used misleading statements to obtain information about the customers' credit card machines, the FTC said. Afterward, the companies used repeated threatening phone calls and letters to collect bills for goods that were unwanted by the customer, according to the FTC.
The settlement also calls for the companies to pay $839,000 to repay customers, with an “avalanche clause” of $70 million to pay if they have misstated their financial status.
In addition, the Canadian Competition Bureau has filed criminal charges against the three principals of the companies.