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Fake Bills - Pro Forma Invoicing: International Directories Corporation
Fake Bills - Pro Forma Invoicing:
International Directories Corporation
Have your received a fax, email or letter from International Directories Corporation
What is pro forma invoicing?
This is a bill your receive for goods or services that you never requested. The scam typically involves sales people from a publishing company contacting a business and falsely claiming that the business agreed to advertise in a particular publication. This is also called "false invoicing" or "false billing". The scam primarily targets small businesses. It is a breach of the law to engage in pro forma invoicing. Also see our page on "Deceptive Ads and Mock bills: sales materials that look like invoices".
Example: International Directories Corporation
We first saw it in February 2007 and they're at it again in 2008. The invoice
has the company president's forged signature at the bottom of the invoice.
It is not his actual signature but is pretty close. Just above the signature
it says: "The following signature and statement were received earlier on a
returned update sheet authorizing making this offer." The payment address
listed is:
International Directories Corporation
130 Church St., #365
New York, NY 10007
Amount of the invoice is $249.00.
Here is an example - we've blotted out the victim's information.:
Reports from visitors:
Received March 13, 2008:
International Directories Corporation past due bill .....this is fraud we have never used this company and the fax we recieve (about 2 per day). there is no contact information for this company other then where to send payment...
International Directories Corporation
130 Church St # 365
New York, NY 10007
Below is a judgment from the FCC against the company and people behind the International Directories Corporation pro form invoicing scam. You can find the original source on the FCC website.
Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
In the Matter of
) File No. EB-05-TC-052
NATIONAL BUSINESS INFORMATION
CORPORATION ) NAL/Acct. No. 200632170008
Apparent Liability for Forfeiture ) FRN: 0015522121
)
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: September 19, 2006 Released: September 20, 2006
By the Commission:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that National Business Information Corporation ("NBIC") apparently
willfully or repeatedly violated section 227 of the Communications Act
of 1934, as amended ("Act"), and the Commission's related rules and
orders by delivering at least 34 unsolicited advertisements to the
telephone facsimile machines of at least 8 consumers. Based on the
facts and circumstances surrounding these apparent violations, we find
that NBIC is apparently liable for a forfeiture in the amount of
$153,000.
II. BACKGROUND
2. On August 31, 2005, in response to consumer complaints alleging that
NBIC had faxed unsolicited advertisements, the Commission staff issued
a citation to NBIC, pursuant to section 503(b)(5) of the Act. The
staff cited NBIC for using a telephone facsimile machine, computer, or
other device, to send unsolicited advertisements to a telephone
facsimile machine, in violation of section 227 of the Act and the
Commission's related rules and orders. According to the complaints,
the unsolicited advertisements offered listings in a business
directory. The citation, which the staff served by facsimile and by
certified mail, return receipt requested, warned NBIC that subsequent
violations could result in the imposition of monetary forfeitures of
up to $11,000 per violation, and included a copy of the consumer
complaints that formed the basis of the citation. The citation
informed NBIC that within 21 days of the date of the citation, it
could either request a personal interview at the nearest Commission
office, or could provide a written statement responding to the
citation. NBIC did not request an interview or otherwise respond to
the citation.
3. Despite the citation's warning that subsequent violations could result
in the imposition of monetary forfeitures, we have received additional
consumer complaints indicating that NBIC continued to engage in such
conduct after receiving the citation. We base our action here
specifically on sworn declarations from 8 consumers establishing that
NBIC continued to send 34 unsolicited advertisements to telephone
facsimile machines after the date of the citation.
4. Section 227(b)(1)(C) of the Act makes it "unlawful for any person
within the United States, or any person outside the United States if
the recipient is within the United States . . . to use any telephone
facsimile machine, computer, or other device to send, to a telephone
facsimile machine, an unsolicited advertisement." The term
"unsolicited advertisement" is defined in the Act and the Commission's
rules as "any material advertising the commercial availability or
quality of any property, goods, or services which is transmitted to
any person without that person's prior express invitation or
permission." Under Commission rules and orders in effect at the time
of the alleged violations discussed in this NAL, the Commission viewed
an established business relationship between a fax sender and
recipient as constituting prior express invitation or permission to
send a facsimile advertisement.
5. Section 503(b) of the Act authorizes the Commission to assess a
forfeiture of up to $11,000 for each violation of the Act or of any
rule, regulation, or order issued by the Commission under the Act by a
non-common carrier or other entity not specifically designated in
section 503 of the Act. In exercising such authority, we are to take
into account "the nature, circumstances, extent, and gravity of the
violation and, with respect to the violator, the degree of
culpability, any history of prior offenses, ability to pay, and such
other matters as justice may require."
III. DISCUSSION
A. Violations of the Commission's Rules Restricting Unsolicited Facsimile
Advertisements
6. We find that NBIC apparently violated section 227 of the Act and the
Commission's related rules and orders by using a telephone facsimile
machine, computer, or other device to send at least 34 unsolicited
advertisements to the 8 consumers identified in the Appendix. This NAL
is based on evidence that these 8 consumers received unsolicited fax
advertisements from NBIC after the Bureau's citation. Each of those
facsimile transmissions advertises a business directory, as well as an
offer to be listed in that directory. NBIC has apparently been sending
the faxes from the Minnesota and Florida locations where Commission
staff sent the citation, using both the NBIC name as well as the name
"International Directories Corporation." In addition, NBIC has
recently been listing a Canadian address on some of its facsimile
advertisements.
7. One example of NBIC's facsimile advertisements begins with the
statement "RETURN THIS PAGE FOR YOUR FREE COPY OF THE NATIONAL
CONTRACTORS GUIDE." The facsimile also provides a sample of how a
recipient's listing would appear in the directory, and directs the
recipient to fill out contact information, sign, and return the
facsimile to NBIC for a "free" copy of the latest directory. In fine
print, below the signature line, the fax includes the following
language: "I am enclosing a payment of $189.00 to cover the cost of
inclusion in the 2006 edition. If payment is not enclosed when
submitting this information, my company agrees to pay $199.00 to cover
the cost of inclusion if the company is to be billed." Another example
of the facsimile advertisements is in the form of an invoice. Sent
under the name of IDC, this facsimile also shows the listing of the
fax recipient's company as it will appear in the NBIC business
directory, and states "Inclusion in the 2006 edition, The National
Contractors Guide, to be published soon. A free copy . . . will be
sent upon publication to those who have paid for inclusion. Total
Amount Due For Inclusion $199. ***Rush Payment to Beat The Deadline
For Your Area." The facsimile is stamped "PAST DUE," and includes an
invoice number and a signature block where the complainant allegedly
signed previously to receive a copy of NBIC's directory. None of the
complainants, however, ordered either a business directory or a
listing in that directory. These facsimiles, which are representative
of the others on which this NAL is based, fall within the definition
of an "unsolicited advertisement" in effect at the time of the alleged
violations.
8. Further, according to their declarations, the consumers neither had an
established business relationship with NBIC nor gave NBIC permission
to send the facsimile transmissions. Therefore, NBIC appears to have
sent each facsimile transmission without the prior express consent of
the consumers. NBIC did not respond to the Commission's citation and
thus has offered no evidence or arguments to defend or justify its
faxing practices. Based on the entire record, including the consumer
declarations, we conclude that NBIC apparently violated section 227 of
the Act and the Commission's related rules and orders by sending 34
unsolicited advertisements to 8 consumers' facsimile machines.
B. Proposed Forfeiture
9. We find that NBIC is apparently liable for a forfeiture in the amount
of $153,000. Although the Commission's Forfeiture Policy Statement
does not establish a base forfeiture amount for violating the
prohibition against using a telephone facsimile machine to send
unsolicited advertisements, the Commission has previously considered
$4,500 per unsolicited fax advertisement to be an appropriate base
amount. We apply that base amount to each of 34 of the apparent
violations, for a total proposed forfeiture of $153,000. NBIC shall
have the opportunity to submit evidence and arguments in response to
this NAL to show that no forfeiture should be imposed or that some
lesser amount should be assessed.
IV. CONCLUSION AND ORDERING CLAUSES
10. We have determined that National Business Information Corporation
apparently violated section 227 of the Act and the Commission's
related rules and orders by using a telephone facsimile machine,
computer, or other device to send at least 34 unsolicited
advertisements to the 8 consumers identified in the Appendix. We have
further determined that National Business Information Corporation is
apparently liable for a forfeiture in the amount of $153,000.
11. Accordingly, IT IS ORDERED, pursuant to section 503(b) of the Act, and
section 1.80 of the Rules, 47 C.F.R. S 1.80, 47 U.S.C. S 503(b), that
National Business Information Corporation is hereby NOTIFIED of this
APPARENT LIABILITY FOR A FORFEITURE in the amount of $153,000 for
willful or repeated violations of section 227(b)(1)(C) of the
Communications Act, 47 U.S.C. S 227(b)(1)(C), sections 64.1200(a)(3)
of the Commission's rules, 47 C.F.R. S 64.1200(a)(3), and the related
orders described in the paragraphs above.
12. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the
Commission's rules, within thirty (30) days of the release date of
this Notice of Apparent Liability for Forfeiture, National Business
Information Corporation SHALL PAY the full amount of the proposed
forfeiture or SHALL FILE a written statement seeking reduction or
cancellation of the proposed forfeiture.
13. Payment by check or money order, payable to the order of the "Federal
Communications Commission," may be mailed to Forfeiture Collection
Section, Finance Branch, Federal Communications Commission, P.O. Box
358340, Pittsburgh, PA 15251. Payment by overnight mail may be sent to
Mellon Client Service Center, 500 Ross Street, Room 670, Pittsburgh,
PA 15262-0001, Attn: FCC Module Supervisor. Payment by wire transfer
may be made to: ABA Number 043000261, receiving bank Mellon Bank, and
account number 911-6229. The payment should note NAL/Acct. No.
200632170008.
14. The response, if any, must be mailed both to the Office of the
Secretary, Federal Communications Commission, 445 12^th Street, SW,
Washington, DC 20554, ATTN: Enforcement Bureau - Telecommunications
Consumers Division, and to Colleen Heitkamp, Chief, Telecommunications
Consumers Division, Enforcement Bureau, Federal Communications
Commission, 445 12^th Street, SW, Washington, DC 20554, and must
include the NAL/Acct. No. referenced in the caption.
15. The Commission will not consider reducing or canceling a forfeiture in
response to a claim of inability to pay unless the petitioner submits:
(1) federal tax returns for the most recent three-year period; (2)
financial statements prepared according to generally accepted
accounting practices; or (3) some other reliable and objective
documentation that accurately reflects the petitioner's current
financial status. Any claim of inability to pay must specifically
identify the basis for the claim by reference to the financial
documentation submitted.
16. Requests for payment of the full amount of this Notice of Apparent
Liability for Forfeiture under an installment plan should be sent to:
Chief, Revenue and Receivables Operations Group, 445 12th Street, SW,
Washington, DC 20554.
17. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
for Forfeiture shall be sent by Certified Mail Return Receipt
Requested to National Business Information Corporation, Attention:
Richard J. McHenry, Sr., CEO, 1346 W. Arrowhead Rd., #302, Duluth, MN
55811; and to National Business Information Corporation aka Business
Information Corporation, Attention: Don Murray, 6924 Aloma Ave.,
Winter Park, FL 32792.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
APPENDIX
Complainant Violation Date(s)
Ed Schmidt, Schmidt Brothers 11/29/05, 1/2/06
Custom Homes, Inc.
Gary Friedman, Cosmopolitan 9/20/05 to 9/25/05 (5 faxes)
Trading
Gene A. Taylor, Dorthy's 6/29/06
Surrender
Jane E. Updegraff, Gem City 12/3/05, 1/19/06
Metal
Kent W. Burkhart, Burkhart 11/25/05
Enterprises
Kristi Guttuso, Hudson Bay 1/26/06, 2/1/06, 2/2/06, 2/3/06,
Development Co., Inc. 2/5/06, 2/12/06, 2/16/06, 2/19/06,
2/26/06, 3/28/06
11/05 (2 faxes), 12/2005 (2 faxes),
Les Ellsworth, Potpourri House 3/9/06, 3/16/06, 3/20/06, 3/23/06,
3/27/06, 3/29/06, 5/4/06 5/12/06
Raul Garcia, True Champions, 2/23/06
Inc.
See 47 U.S.C. S 503(b)(1). The Commission has the authority under this
section of the Act to assess a forfeiture against any person who has
"willfully or repeatedly failed to comply with any of the provisions of
this Act or of any rule, regulation, or order issued by the Commission
under this Act ...." See also [1]47 U.S.C. S 503(b)(5) (stating that the
Commission has the authority under this section of the Act to assess a
forfeiture penalty against any person who is not a common carrier so long
as such person (A) is first issued a citation of the violation charged;
(B) is given a reasonable opportunity for a personal interview with an
official of the Commission, at the field office of the Commission nearest
to the person's place of residence; and (C) subsequently engages in
conduct of the type described in the citation).
According to publicly available information, NBIC is headquartered at 1346
W. Arrowhead Rd., #302, Duluth, MN 55811; an alternate address, under the
name International Directories Corporation ("IDC"), is 6924 Aloma Ave.,
Winter Park, FL 32792. See text accompanying n.14, infra. Therefore, all
references in this NAL to "NBIC" encompass National Business Information
Corporation as well as International Directories Corporation. NBIC's
registered agent is Richard J. McHenry, Sr., who is also listed as the
Chief Executive Officer. Don Murray is listed as the contact person for
NBIC's Florida address. Accordingly, all references in this NAL to "NBIC"
also encompass Richard J. McHenry, Sr., Don Murray, and all other
principals and officers of these entities, as well as the corporate
entities themselves.
See [2]47 U.S.C. S [3]227(b)(1)(C); [4]47 C.F.R. S 64.1200(a)(3); see
also Rules and Regulations Implementing the Telephone Consumer Protection
Act of 1991, Report and Order, 18 FCC Rcd 14014, 14124, para. 185 (2003)
(TCPA Report and Order) (stating that section 227 of the Act prohibits the
use of telephone facsimile machines to send unsolicited advertisements).
Citation from Kurt A. Schroeder, Deputy Chief, Telecommunications
Consumers Division, Enforcement Bureau, File No. EB-05-TC-052, issued to
NBIC on August 31, 2005.
See 47 U.S.C. S 503(b)(5) (authorizing the Commission to issue citations
to non-common carriers for violations of the Act or of the Commission's
rules and orders).
See, e.g., Complaint letter from Jill Gilbert, AHA Services, Inc., dated
August 26, 2005, which was attached to the citation (stating that her
company regularly receives multiple unwanted fax advertisements from NBIC,
even though she has requested that NBIC stop sending the faxes, and her
company has had no prior business association with NBIC).
Commission staff mailed the citation to NBIC's Minnesota and Florida
addresses. See n.2, supra. Although the U.S. Postal Service returned to
the Commission as "unclaimed" the copy of the citation sent to NBIC's
Florida address, NBIC signed the return receipt for the citation sent to
its Minnesota address.
See Appendix for a listing of the consumer declarations from complainants
requesting Commission action.
We note that evidence of additional instances of unlawful conduct by NBIC
may form the basis of subsequent enforcement action.
47 U.S.C. S 227(b)(1)(C).
Rules and Regulations Implementing the Telephone Consumer Protection Act
of 1991, Memorandum Opinion and Order, 10 FCC Rcd 12391, 12408, para. 37
(1995) (1995 TCPA Reconsideration Order); see also Rules and Regulations
Implementing the Telephone Consumer Protection Act of 1991, Order, 20 FCC
Rcd 11424 (2005). Under the Junk Fax Prevention Act of 2005, Pub. L.
109-21, 119 Stat. 359 (2005), Congress amended the Communications Act to
specify, among other things, the conditions under which an established
business relationship provides an exception to the prohibition on
unsolicited fax advertising. The Commission recently released rules to
implement the Junk Fax Prevention Act, including rules that determined
specific time parameters for the established business relationship
exception. See Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991, Report and Order and Third Order on
Reconsideration, 21 FCC Rcd 3787 (2006). These revised rules were not in
effect at the time of the alleged violations in this case, although the
Commission's original established business relationship exception was in
effect, as noted above.
Section 503(b)(2)(C) provides for forfeitures up to $10,000 for each
violation in cases not covered by subparagraph (A) or (B), which address
forfeitures for violations by licensees and common carriers, among others.
See 47 U.S.C. S 503(b). In accordance with the inflation adjustment
requirements contained in the Debt Collection Improvement Act of 1996,
Pub. L. 104-134, Sec. 31001, 110 Stat. 1321, the Commission implemented an
increase of the maximum statutory forfeiture under section 503(b)(2)(C) to
$11,000. See 47 C.F.R. S1.80(b)(3); Amendment of Section 1.80 of the
Commission's Rules and Adjustment of Forfeiture Maxima to Reflect
Inflation, 15 FCC Rcd 18221 (2000); see also Amendment of Section 1.80(b)
of the Commission's Rules and Adjustment of Forfeiture Maxima to Reflect
Inflation, 19 FCC Rcd 10945 (2004) (this recent amendment of section
1.80(b) to reflect inflation left the forfeiture maximum for this type of
violator at $11,000).
47 U.S.C. S 503(b)(2)(D); The Commission's Forfeiture Policy Statement and
Amendment of Section 1.80 of the Rules to Incorporate the Forfeiture
Guidelines, Report and Order, 12 FCC Rcd 17087, 17100-01 para. 27 (1997)
(Forfeiture Policy Statement), recon. denied, 15 FCC Rcd 303 (1999).
See n.2, supra.
See, e.g., declaration dated June 21, 2006, from Jane E. Updegraff, Gem
City Metal, facsimile attachments.
Declaration dated August 8, 2006, from Kristi Guttuso, Hudson Bay
Development Co., Inc, facsimile attachments. A copy of one of these
facsimiles is attached in the Appendix as an example. We have redacted
certain identifying information of the complainant.
Declaration dated June 22, 2006, from Raul Garcia, True Champions, Inc.,
facsimile attachment. A copy of this facsimile is attached in the Appendix
as an example. We have redacted certain identifying information of the
complainant, including the apparently falsified signature.
See, e.g., Declaration dated June 22, 2006, from Raul Garcia, True
Champions, Inc. (stating that to the best of his knowledge, at no time did
anyone in his household engage in any business transaction with IDC). This
second type of advertisement appears to be designed to fraudulently convey
that the recipient already ordered a business directory. The Commission
staff has referred the possible fraud aspects of this case to the Federal
Trade Commission.
At the time of the alleged violations, the term "unsolicited
advertisement" (then codified at 47 U.S.C. S 227(a)(4) and 47 C.F.R. S
64.1200(f)(10)) meant "any material advertising the commercial
availability or quality of any property, goods, or services which is
transmitted to any person without that person's prior express invitation
or permission." The current definition is codified at 47 U.S.C. S
227(a)(5) and 47 C.F.R. S 64.1200(f)(13).
See, e.g., Declaration dated June 30, 2006, from Les Ellsworth (stating
that, to the best of his knowledge, at no time did anyone in his household
give IDC prior express consent to deliver a facsimile advertisement, nor
did anyone engage in any business transaction with IDC). All of the
complainants involved in this action are listed in the Appendix below.
Mere distribution or publication of a fax number does not establish
consent to receive advertisements by fax. 1995 Reconsideration Order, 10
FCC Rcd at 12408-09, para. 37; see also Rules and Regulations Implementing
the Telephone Consumer Protection Act of 1991, Memorandum Opinion and
Order, 18 FCC Rcd 14014, 14129, para. 193 (2003) (concluding that mere
publication of a fax number in a trade publication or directory does not
demonstrate consent to receive fax advertising).
See Get-Aways, Inc., Notice of Apparent Liability For Forfeiture, 15 FCC
Rcd 1805 (1999); Get-Aways, Inc., Forfeiture Order, 15 FCC Rcd 4843
(2000); see also US Notary, Inc., Notice of Apparent Liability for
Forfeiture, 15 Rcd 16999 (2000); US Notary, Inc., Forfeiture Order, 16 FCC
Rcd 18398 (2001); Tri-Star Marketing, Inc., Notice of Apparent Liability
For Forfeiture, 15 FCC Rcd 11295 (2000); Tri-Star Marketing, Inc.,
Forfeiture Order, 15 FCC Rcd 23198 (2000).
See 47 U.S.C. S 503(b)(4)(C); 47 C.F.R. S 1.80(f)(3).
47 C.F.R. S 1.80.
47 C.F.R. S 1.1914.
Although without the exact dates, Mr. Friedman recalls receiving a total
of 5 faxes between September 20, and September 25, 2005. See Declaration,
dated July 18, 2006, from Gary Friedman.
Although without the exact dates, Mr. Ellsworth recalls receiving 2 faxes
in November, 2005, and 2 faxes in December, 2005. See Declaration, dated
June 30, 2006, from Les Ellsworth.
(...continued from previous page)
(continued....)
Federal Communications Commission FCC 06-140
1
2
Federal Communications Commission FCC 06-140
How to avoid pro forma invoices
- Ask for proof that the advertisement was agreed to - no proof, no payment.
- Verify the booking with colleagues.
- Ask if the publisher has had a circulation audit done by the Circulations Audit Bureau (CAB) or the Audit Bureau of Circulations (ABC). While the absence of an audit does not necessarily mean the publication is not genuine, its presence is positive evidence otherwise.
- Ask for specific evidence that the publishing company has been commissioned by an organization to publish the magazine on their behalf.
- Keep records of telephone conversations discussing advertising, including date, what was discussed and who it was discussed with.
- Have an advertising booking system in place and ensure all staff are aware of it.
- Inform the company in writing that the advertisement they are charging you for was not authorized and will not be paid for.
- Seek legal advice if threatened with legal action.
- In the U.S. file a complaint with the
Federal Trade Commission.
In New Zealand, inform the Commerce Commission.
If you receive an invoice from these companies, we suggest you do not pay.
For a comprehensive list of national and international agencies to report scams, see this page.