MDSC PUBLISHING ripoff MONTREAL Quebec

Welland firms charged in scam

By ANGUS SCOTT, Tribune Staff

Thursday, July 22, 2004 - 09:00

Local News - WELLAND - A lengthy cross-border investigation into a Welland-based telemarketing program has resulted in charges being laid in Canada and the United States.

In Canada, two telemarketing firms located at 76 Division Street, Suite 206, each face charges of fraud over $5,000 and attempted fraud. Their owner faces two counts of fraud over $5,000 and two counts of attempted fraud.

The businesses are 4049705 Canada Inc., operating as Pinacle Publishing, and 3782484 Canada Inc., operating as MDSC Publishing, says an NRP release. The owner of both companies is Terrence Croteau, 29, said the release.

In the U.S., the Federal Trade Commission (FTC) has laid civil charges under the FTC Act, alleging the businesses scammed small businesses and charities out of millions of dollars.

The FTC complaint alleges the firms have been making telemarketing calls to small businesses, charities and other organizations across the States since 2000. Allegedly, the defendants call to verify names, addresses and telephone numbers for a listing in a business directory. Consumers are led to believe they are already listed in the directory and the listing is being updated.

The FTC alleges the defendants record consumers verifying their information and later use the recordings to prevent them from cancelling unauthorized orders.

Consumers are often not told there is a fee associated with being listed in the directory, said the FTC.

Victims receive invoices for $389.99, $279.99 or $336.99 depending on the type of listing. When consumers called to cancel the order, they were allegedly told the company had a tape recording of the order being placed and this was a binding oral contract.

Consumers who refuse to pay have been referred to the defendants' in-house collection department, which allegedly harasses them, says the FTC. Many consumers ended up paying as a way of stopping the ongoing harassment, says the FTC.

Katherine Romano Schnack, a staff attorney with the FTC's midwest regional office in Chicago, told The Tribune the total amount of money involved and the number of victims remains unknown. Further investigation will give us an idea of how much money is involved, but my guess is this is not one of the smaller operations we've investigated, said Schnack. It's not the biggest either, it's in the middle.

The U.S. charges claim the defendants violated the federal FTC Act by billing victims for business directory services they did not order or authorize. The FTC has asked the US District Court for the Northern District of Illinois, Eastern Division, to impose an injunction temporarily barring the defendants' business practises and freezing the defendants' assets. The request will be heard on Tuesday, July 27.

Our agency only has civil authority, said Schnack. Our goal is to recover as much money as possible for the victims.

The Niagara Regional Police (NRP), the OPP and the Toronto Strategic Partnership, a cross-border fraud enforcement partnership, aided the American agency with the investigation.

We have had invaluable assistance from the Niagara Regional Police in particular, said Schnack.

On the American side, the United States Postal Inspection Service and Department of Justice were also involved in the investigation.

NRP Detective Jeff Skelton said the force has been involved in the investigation for about a year.

We've been receiving sporadic complaints from business and organizations in the US over the past year, he said.

The NRP executed a search warrant at the companies' offices on Division Street on April 22 of this year as part of the investigation

A Sept. 15, 2004 court appearance is scheduled in the Ontario Court of Justice, Provincial Division, in Welland for the Canadian charges to be heard.

Montreal is the home of many of these scam companies. The premise is always the same: you are obligated for some listing in their business directory. They are total frauds. Do not pay them. Report them to the authorities.