Roughly 2,900 businesses paid more than $360K as a result of a deceptive mailer
SEATTLE — A King County Superior Court judge today ordered civil penalties and restitution up to $1.15 million in Attorney General Bob Ferguson’s lawsuit against Mandatory Poster Agency (MPA). The company duped thousands of Washington small businesses into paying for documents many people thought were coming from a state agency.
Judge William Downing granted summary judgment in December 2015, and today issued his decision on penalties and restitution. Judge Downing found MPA violated the state Consumer Protection Act 79,354 times.
“This scam — by repeat offenders — stole cash out of the pockets of hardworking small-business owners,” Ferguson said. “When scammers mislead people into paying money they don’t owe, my office will hold them accountable.”
Today’s judgment includes $793,540 in civil penalties and up to $362,625 in restitution for victims. Judge Downing previously ordered that MPA would be required to pay the state’s attorneys’ fees and costs. A decision on the amount has not yet been issued, but the state has submitted a request for more than $370,000.
A claims administrator will be retained within 45 days, who will then verify the contact information for MPA’s victims and begin the process of contacting individuals who may be entitled to restitution. Victims will have to return a claims form to obtain restitution.
Ferguson filed a consumer protection lawsuit against MPA in June 2014, accusing the company of tricking more than 2,900 small businesses into paying $125 each to prepare documents that looked like they came from the government.
MPA, also doing business as Corporate Records Service, sent envelopes marked “Important: Annual Minutes Requirement Statement” to roughly 80,000 Washington businesses in 2012 and 2013. The envelopes contained a document called “Annual Minutes Form; Shareholders, Directors and Officers” and a one-page sheet of instructions.
The instructions directed business owners to send the completed form with a $125 payment to a PO Box in Olympia to “satisfy the annual minutes requirement for your corporation.”
The form came preprinted with the corporation’s name and referenced several Washington laws. Many victims were deceived into believing the form was from a state agency and that they were required to return it.
The Washington Secretary of State has issued multiple warnings and alerts about MPA’s deceptive mailers.
Actions violate 2008 agreement with Attorney General’s Office
This is not MPA’s first attempt to trick businesses with phony government fees.
The AGO previously entered into an agreement with MPA in 2008 after MPA made similar solicitations under the names “Washington Labor Law Poster Service,” “Washington Food Service Compliance Center,” and “Washington Healthcare Compliance Center.”
Those mailings also appeared to be government documents and urged businesses to immediately purchase and post certain government safety and labor law posters to comply with the law and avoid government penalties.
The posters, which are required by law to be posted in certain businesses, are actually available free from government agencies.
In resolving the 2008 matter, MPA agreed that it would not, among other things, use “words or terms that have a tendency to mislead recipients to believe the solicitation is from a government agency” or represent “on envelopes or exterior mailings that an enclosed solicitation requires immediate or other mandated response.”
Assistant Attorneys General Marc Worthy and Jeff Rupert represented the state in the present case.
The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.
Peter Lavallee, Communications Director, (360) 586-0725; PeterL@atg.wa.gov