National Business Information Exchange Same ripoff, different company name Colorado Springs Chesapeake Beach Maryland

'Hounded, Harassed, Harangued'
Complaints Made About Firm's Sales Tactics

By Kenneth Bredemeier
Washington Post Staff Writer
Wednesday, December 25, 2002; Page E01

The sales calls to Beltway Movers' headquarters in Forestville started earlier this year, an unsolicited pitch for software with telephone listings for a million companies, sort of a high-tech Yellow Pages.

Then the bills came, and the dunning notices -- 14 in all between March and July -- about the unpaid $179 bill. No software had been delivered -- or even ordered -- but there were still more angry calls and letters saying the bill hadn't been paid.

Despite the persistent calls from National Info-Tech Center of Montreal, David Niebauer, Beltway Movers' general manager, was determined not to pay a bill for something he neither wanted nor ordered.

"I knew pretty much this was bogus," Niebauer said. "I did not roll over. I was livid at them. It was a matter of principle."

Finally, in October, after enlisting help from the Better Business Bureau in Washington, Niebauer won assurances from National Info-Tech that it no longer considered Beltway Movers a debtor and that "if any products should arrive, [Beltway Movers should] consider them a gift."

Niebauer said he still does not want the software. His assessment of National Info-Tech was even more blunt: "It's a scam. That's as simple as I can say it."

Canadian law enforcement officials; Edward J. Johnson III, president of the Better Business Bureau of Metropolitan Washington and Eastern Pennsylvania; and hundreds of other business executives have reached the same conclusion.

Johnson said more than 500 businesses here and elsewhere have filed complaints with his office against National Info-Tech and a Winnipeg, Manitoba, firm, IBI-International Business Index Inc., which also sells versions of the CD-ROM telephone directory with 600,000 to 1 million listings on it.

"The complainants are adamant that they never made an order," Johnson said of the businesses that have filed complaints against the firms. "Given the volume of complaint activity and the pattern of allegations, it is quite clear that their business practices lack integrity, that there has been a very distinct breach of ethics."

A lawyer for several company officials in Winnipeg denied that the firm has done anything wrong.

Stuart Ashby, manager of the counseling unit for the Virginia consumer affairs office, said his office has received 16 complaints over the past three years about the firms, with businesses saying that they were "hounded, harassed, harangued -- pick one of those -- to pay for a directory they did not order. The approach is one of threatening, we're going to sue you, ruin your credit if you don't pay."

In September, Idaho Attorney General Alan G. Lance warned businesses there about National Info-Tech's sales pitches, saying, "Businesses have been billed $200 to $500 for merchandise they did not purchase and often promptly returned to National Info-Tech, unopened and unused. Some businesses have received collection notices after having refused to pay."

Late last month, the Royal Canadian Mounted Police in Winnipeg charged National Info-Tech, "also operating as International Business Index," and four of its executives with fraud involving more than $5,000. They included John Nguyen, 28, president of IBI; his mother, Ngoc Thi Vo, 50, National Info-Tech's chief executive; Dan Rautavuori, 23, the sales manager in Winnipeg; and Odessa Rosati, 23, the Winnipeg collections manager. Vo and Nguyen were released on $250,000 bonds and had to surrender their passports, while Rautavuori and Rosati were freed on $50,000 bonds. No trial date has been set.

Nguyen's brother Ty, president of National Info-Tech, was not charged.

Cpl. Dave Scott, an investigator for the commercial crimes section of the Royal Canadian Mounted Police in Winnipeg, said the corporate names for National Info-Tech and IBI "are used interchangeably," and he alleged the telemarketing of the software has cost "thousands of victims in the U.S. millions of dollars." He said the Winnipeg operation was shut down after the arrests.

Ray Flett, a Winnipeg lawyer who represents National Info-Tech and Vo, said the accused are not guilty and will contest the charges. He described Vo as "just an outstanding woman" and said her position as chief executive is "less than meets the eye." "She was responsible for financing" the telemarketing, "not operational" control.

Flett described the telemarketing at the firm as "cold-call selling and it's aggressive as the dickens." He said only about one-fourth to one-half of 1 percent of the telemarketing calls result in sales.

Cory Kornelson, National Info-Tech's operations manager, said the Montreal firm aims its telemarketing into the United States and uses a mail drop at a Mail Boxes Etc. outlet at the Bellewood Commons shopping center in Leesburg "to speed mail to us." National InfoTech's Web site lists the Leesburg site as its "marketing division" in "Suite 302." But the Mail Boxes storefront is in a one-story building and there is no Suite 302 at the Market Street address.

"We do telemarketing over the telephone," Kornelson said. "That industry does have a black eye. We're business-to-business only, not residential. You hear of scams. National Info-Tech is taking a black eye for a lot of these other telemarketers. We do a high level of volume."

He said the firm sold between 40,000 and 50,000 CD telephone directories in 2001 and expects to finish 2002 with about 50,000 to 55,000 sales.

"It's basically a Yellow Pages, with a lot of added features, a searchable database, phone numbers, fax numbers, a description of the company, gross revenue, a key decision maker in the company," Kornelson said. He added that the listings are updated every three or four months, but a customer must buy a new CD to get the new listings.

"We work very closely with the BBB to try to resolve the situations with customers who have complained," he said. "We respond back to [the BBB to] give our side. Sometimes [executives at companies] don't know all the details of the sale" that Kornelson said might have been authorized by someone else in a company. "After that, if the customer is not satisfied, we'll try to contact them" individually. "We do have many customers who are satisfied, many who are repeat customers."

But Niebauer, of Beltway Movers, tells a different story.

"There were very aggressive phone calls and invoices saying, 'Your account is delinquent.' This went on for months," Niebauer said. "They were calling other members of the company. I told all my staff to send all the calls to me. They were trying everything to get around me. "

This scam must be pretty lucrative, as there are a whole lot of "companies" operating out of Canada who do the same thing. It seems that the same people keep using new names to stay in the same game.

But in most states uinordered merchandise can be considered a gift--though I would never actually place the CD in my computer. Consider the source!!

If you are like me, however, and have no desire to collect useless CDs, simply refuse delivery on the unopened item. This costs you nothing Eventually you will cost them enough money that they will move on.