SEATTLE - Attorney General Christine Gregoire has filed a lawsuit against a Seattle firm that charged a fee to provide certified public accountants with leads on clients, but then did not make good on its promises.
The firm, Marketing Systems of America, uses the Internet to advertise that it can provide accountants with lists of potential customers in need of accounting services.
But in the lawsuit filed in King County Superior Court earlier this week, the Attorney General's High Tech Unit accused the firm and its president Randy Hirsch of delivering only a miniscule number of clients to the accountants and of other violations of the state's Consumer Protection Act.
Specifically, state attorneys accused the firm of failing to provide promised services, misrepresentation and failing to provide refunds.
At the request of state attorneys, the court today agreed to freeze the company's assets to ensure that money is available to pay victims back if ordered.
According to the lawsuit, the company, which is still in operation, advertises on the Internet that it will secure -- for a fee of $425 -- "at least two monthly (or quarterly) small business accounting clients every 2-3 month period." In fact, according to the lawsuit, only a few of the accounting firms received any service at all, and the vast majority never obtained any clients.
According to investigators, the firm had between 1,100 and 1,700 accountant customers in the last six months of 2001, but signed only 20 clients for the entire group.
The Attorney General's Office has received nearly 60 complaints against Marketing Services of America and estimates the losses at more than $21,000.
In the lawsuit, the state is asking that the court order the firm to live up to its promises, that it pay an undetermined amount of civil penalties and restitution and that it reimburse the state for the cost of the lawsuit and investigation.