For Release:
August 1, 2002 Company That Posed as a Legitimate Reference
Agency Settles FTC Charges
A for-profit company operating out of Grand Prairie, Texas,
and its owners, have agreed to settle federal charges that they defrauded consumers by
posing as a reference agency that provided non-biased and accurate information about its
member companies. The Federal Trade Commission had alleged that rather than offering
independent and reliable information, the defendants essentially were shills for their
fraudulent business opportunity members, who were primarily vending machine business
opportunity sellers. As part of the proposed settlement, Affiliated Vendors Association,
Inc., and its owners are permanently banned from receiving any compensation or
remuneration in exchange for serving as a reference.
The FTC filed its complaint against Affiliated Vendors
Association, Inc., doing business as AVA and North American Business Registry, and Maurice
and Joyce Billion as part of the "Operation Dialing for Deception" law
enforcement sweep announced on April 15, 2002. According to the complaint, the defendants
allegedly ran a sham Better Business Bureau-type organization that gave consumers glowing
reports about its members. AVA members allegedly paid the company for pitching their
businesses to consumers over the phone. The company never told consumers of its connection
to the sellers and misrepresented the support and services that its members would provide
to business opportunity purchasers.
To settle the charges, the defendants permanently are banned
from receiving any compensation or remuneration in exchange for serving as a reference,
and from using the names "Affiliated Vendors Association, Inc.," "North
American Business Registry," or any variation of either. The defendants also are
prohibited from making any false or misleading statements in connection with any business
that reports information on a franchise, business opportunity, or business venture to
consumers, and from assisting others engaged in reporting information on a franchise,
business opportunity, or business venture to consumers. In addition, the order contains a
$400,000 judgment against the defendants, which is suspended based on the defendants'
financial information. The entire amount will become due if the court finds that the
defendants made any material misrepresentations about their financial situation.
The Commission vote to authorize staff to file the stipulated
final judgment and order was 5-0. The stipulated final judgment and order was filed in the
U.S. District Court for the Northern District of Texas, in Dallas, on July 24, 2002, and
entered by the judge on July 25, 2002. The FTC's East Central Region - Cleveland handled
this litigation. |