OLYMPIA, Wash. — The Washington State Attorney General’s Office (AGO) announced today, May 9th, that it has filed a consumer protection lawsuit against 2 businesses and their owner “for sending hundreds of thousands of deceptive texts and emails to Washington businesses and nonprofits.” According to the announcement, the deceptive messages cost some Washington businesses a total of at least $163,000.
The large-scale text and email scheme targeted Washington small businesses and nonprofits according to the announcement.
The lawsuit (links to a PDF file), filed in King County Superior Court, accuses the 2 Wyoming companies and their owner, Cameron Groom, of sending deceptive solicitations that were designed to appear to have been sent by the Secretary of State.
Tens of thousands of text message solicitations demanded $200 to file annual reports with the Secretary of State. The texts did not disclose that businesses can file required annual reports directly with the Secretary of State’s Office for $60. For nonprofits, the cost is between $20 and $60, depending on the nonprofit’s annual gross revenue.
AdvertisementClick for more information
Advertisement
Click for more informationOther text solicitations demanded between $150 and $175 to file annual meeting minutes. Washington state does not require either to file annual meeting minutes. Washington State Attorney General’s Office (May 9, 2023)
A preliminary injunction to bar the companies from sending future solicitations to Washington businesses is expected.
In just over a year, EFile Business Inc. and Online Filing LLC sent more than 147,000 deceptive text messages to Washington businesses and nonprofits. More than 800 Washington companies paid EFile and Online Filing to submit annual reports at more than three times what it would have cost them to file the reports themselves. Ferguson expects to uncover even more businesses that were deceived by EFile and Online Filing through the litigation.
The Attorney General’s Office received 19 complaints about the businesses, and the Secretary of State received complaints, as well. The complaints prompted an Attorney General’s Office investigation beginning in May 2022. The Secretary of State also posted a notice warning about the deceptive solicitations.
AdvertisementClick for more information
AdvertisementClick for more information
The AGO is seeking restitution for impacted businesses, plus interest, and civil penalties from the companies for their deceptive conduct. Washington State Attorney General’s Office (May 9, 2023)
Defendants sent deceptive, unsolicited texts and emails
Beginning in January 2022, the companies sent unsolicited deceptive spam text messages and emails to Washington businesses and nonprofits after obtaining their information through publicly available sources.
Ferguson’s lawsuit asserts that the scheme is an unfair or deceptive practice under the Washington Consumer Protection Act and that it also violates the state’s Commercial Electronic Mail Act and the Uniform Business Organizations Code.
The AGO’s announcement notes that Washington businesses and nonprofits are required to file an annual report each year by the last day of the month in which they originally formed. Prior to that date, the Washington Secretary of State notifies the business by mail or email. The Secretary of State does not send text solicitations.
Click for more information
Click for more informationBusinesses and nonprofits are not required to submit annual meeting minutes to the state.
In a similar case in 2016, a King County Superior Court judge ordered civil penalties and restitution of $1.15 million be paid by Michigan-based Mandatory Poster Agency. The company was found to have duped thousands of businesses in Washington into paying for documents they thought were coming from a state agency. The judge found Mandatory Poster Agency violated the state Consumer Protection Act 79,354 times. The judgment included $793,540 in civil penalties and up to $362,625 in restitution for victims.
In another similar case in 2022, a King County Superior Court judge ordered CA Certificate Service and Labor Poster Compliance and their owners to pay more than $24.8 million after they were found to have sent hundreds of thousands of letters to Washington business owners that deceptively appeared to originate from the government. The letters demanded payments for posters or certificates that they deceptively implied were required to purchase. The certificate is not mandatory and available from the state for a fraction of the cost that CA Certificate Service demanded. The posters are available from state and federal agencies for free.