American Business Registry Sellers Barred from Billing U.S. Consumers Who Never Authorized Listings

Ambus Registry, Inc. and its two principals have agreed to be enjoined preliminarily from calling American consumers and misrepresenting that they have agreed to purchase the company’s “American Business Registry” and a listing in the directory. In addition, the defendants have agreed to suspend all collection activities on accounts that were established prior to the filing of the Federal Trade Commission’s lawsuit. According to the FTC complaint, which led to the preliminary injunction announced today, the Ambus defendants trained their telemarketers to use deceptive sales tactics to convince U.S. consumers and businesses that someone in their company had authorized its listing in the directory, as well as the purchase of the directory itself. The defendants, all based in Calgary, Canada, allegedly billed the consumers for between $299-399 and, despite a supposed 30-day trial period, systematically rejected consumers’ requests for a full refund.

“There is no legitimate reason to mislead businesses into believing that they’ve ordered a service when they haven’t,” said Howard Beales, Director of the FTC’s Bureau of Consumer Protection. “It’s a fraud and we’re committed to stopping this type of activity when we find it.”

According to the FTC, since at least 2000, Ambus representatives have called U.S.

companies and government agencies in an attempt to trick them into buying the “American Business Registry” (Ambus directory) and a two-year listing in the directory. During most calls, Ambus’ telemarketers allegedly tell consumers they are calling to notify them that the Ambus directory will be mailed to them in the near future and that they are calling to verify the accuracy of the organization’s listing in the directory. The FTC contends that during these calls, the telemarketers represent, either directly or indirectly, that the consumer or someone else in the organization has authorized the company’s listing in the directory. If consumers tell Ambus’ telemarketers that they do not want the directory and/or listing or question the authorization for the purchase, the telemarketers allegedly assure them that there is a 30-day trial period during which the consumers can receive a refund if not fully satisfied.

Once consumers agree to verify the listing information and/or to have the directory sent to them for review, they receive a call from Ambus’ verification department. The FTC contends that, during this follow-up call, the verifier again confirms the organization’s listing information, as well as the name of the person to whom an invoice will be sent. Most invoices allegedly state that the total bill is comprised of a $298 charge for a two-year listing in the Ambus directory, $90 for the CD-ROM version of the directory, and $20 in miscellaneous charges.

The FTC alleges that after receiving the bill, many consumers find that no one in their organization has authorized Ambus to charge them for the directory and/or listing therein. When consumers contact Ambus seeking a refund, the company allegedly refuses to do so. According to the FTC, although in some instances the company gives consumers a partial credit for the returned directory, Ambus’ representatives harass consumers, often by telephone and through threatening letters, in an attempt to collect the alleged balance due for the two-year listing.

The FTC’s complaint contains three charges against the Ambus defendants, each of which alleges a violation of Section 5 of the FTC Act. Count I alleges the defendants falsely represent that consumers previously have authorized the purchase of the business directory and their listing in the directory. Count II alleges that the defendants falsely represent that consumers have agreed to purchase the directory, as well as a listing in the Ambus directory. According to the Commission, Ambus claims that consumers who simply verify their information for Ambus’ representatives have authorized the purchase of the listing and directory. Count III charges the defendants with falsely representing that consumers have a right to cancel their directory and listing in the directory without obligation. According to the Commission, although Ambus’ representatives assure consumers that they can send the packages back within 30 days, in fact, at best, Ambus provides only partial refunds and does not fully honor its 30-day trial period.

The Commission vote authorizing the staff to file the complaint was 5-0. It was filed under seal in U.S. District Court for the Western District of Washington, at Seattle, on June 16, 2003, and the court granted the FTC’s request for an ex parte temporary restraining order on June 17, 2003. The summons, complaint, and related pleadings were served on the defendants on June 18, 2003. The district court issued the stipulated preliminary injunction on July 15, 2003.

In filing its complaint, the FTC sought preliminary and permanent injunctive relief, including consumer redress, against Ambus Registry, Inc., and its owners, Garther Cheung and Sukhraj Singh Chana. The FTC worked closely with the Canadian Competition Bureau and Alberta Government Services in investigating this case and filing the complaint. The FTC also received invaluable assistance from the Better Business Bureau of Southern Alberta, the Royal Canadian Mounted Police, and the Calgary Police.

NOTE: The Commission issues or files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the named parties have violated the law. The case will be decided by the court.

Copies of the Commission’s complaint are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. 032-3027; Civ. No. CV03-1294R)