May 25, 2022

StrategisChhr

Skillful Business Crafters

CONSUMER ALERT: Washington state small business owners targeted by scams requesting payment for certificates, posters

Companies overcharging for items that are free, or a fraction of the demanded price

SEATTLE — Attorney General Bob Ferguson is alerting Washingtonians to scammers targeting new business owners, sending hundreds of thousands of deceptive letters into the state. The letters deceptively appear to originate from the government, and demand payment for documents that should be free, or are available for a much lower price from the legitimate agency. About 15,000 Washington businesses have already fallen victim, paying more than $1.2 million.

Any Washingtonians who received letters from WA Certificate Service or Labor Poster Compliance asking them to pay for either a Certificate of Status, Certificate of Existence, or “labor law poster” should contact the Attorney General’s Office immediately.

You can file a complaint online at atg.wa.gov/file-complaint or call the office toll-free at 1-800-551-4636.

The Attorney General’s Office already received more than 90 complaints about the letters.

One business owner wrote: “When I got back from vacation for Christmas, I had a letter in my mailbox from this organization, stating that I needed to submit payment for a certificate by 1/3/2020. I (stupidly) filled out the form and sent the payment without checking its validity. Only after the fact did I look on the [Secretary of State] corporations site to find out this is a full-fledged SCAM.”

“My office is seeking to put a stop to these scammers and get Washington business owners their money back — with interest,” Ferguson said. “If you received these letters, and especially if you paid for documents as a result, we want to hear from you. You can help us end this scam and hold those responsible accountable.”

Ferguson filed consumer protection lawsuits against the companies on March 17. Ferguson’s two lawsuits, both filed in King County Superior Court, assert CA Certificate Service, which also does business as WA Certificate Service, and Labor Poster Compliance violated the state Consumer Protection Act hundreds of thousands of times. Ferguson also filed motions for preliminary injunction to shut down the companies’ operations in Washington and prevent further mailings of their deceptive letters while the cases are ongoing.

The lawsuits name the four co-owners of CA Certificate Service — James L. Beard, Dean G. Marshlack, Chad M. Davis and Joshua T. Strawn — and two co-owners of Labor Poster Compliance, James L. Beard and Chad M. Davis. The four owners are located in the St. Petersburg, Florida area, and their companies operate nationwide.

The scammers have targeted Washingtonians who recently registered a new business to pay $82.50 for a certificate that actually costs $20 through the Washington Secretary of State or $79.25 for a poster that is free from state and federal governments.

The two companies sent at least 210,784 letters into Washington state since March 2019. Ferguson asserts these companies unlawfully duped small business owners into making unnecessary payments.

At least 14,743 Washington business owners paid $82.50 to CA Certificate Service — a total of approximately $1.2 million. The Attorney General’s Office estimates over 318 Washingtonians paid Labor Poster Compliance $79.25 — a total of more than $25,000.

The following images show an example of a deceptive letter and an envelope:

GRAPHIC: Letter from WA Certificate Service

What to do if you receive a suspicious letter requesting payment

These scammers mainly target people who recently registered a new business by mailing them letters within days of the registration. This confused many Washingtonians to think the letters, which mimic official government forms, came from or on behalf of a state agency. Washingtonians should contact that agency to make sure any company is acting on behalf of the agency if they ask for payments.

Before sending any money to any company that demands payment for paperwork or posters, research the company. For instance, with both of these companies:

Washington small business owners detailed their interactions with the company

Several Washington small business owners spoke to the Attorney General’s Office about their experiences.

  • One Seattle-area business owner received a letter from WA Certificate Service within days of registering her business in January 2020. She writes: “When I got back from vacation for Christmas, I had a letter in my mailbox from this organization, stating that I needed to submit payment for a certificate by 1/3/2020. I (stupidly) filled out the form and sent the payment without checking its validity. Only after the fact did I look on the [Secretary of State] corporations site to find out this is a full-fledged SCAM.” She was able to stop payment on the check in time.
  • Another Seattle-area business owner and U.S. military veteran received a letter in January 2021. He said he received a letter from WA Certificate Service shortly after registering his business. He writes: “Upon my receipt of the WACS letter it resembled a bill as it included a request for payment with a due date. My initial reaction was to pay the bill, but I was unsure so I conducted further research and discovered that WACS was not a Washington [Secretary of State] or government related office. … I believe WACS is preying on new businesses in a fraudulent manner.”
  • A Spokane business owner received letters from both WA Certificate Service and Labor Poster Compliance about a week after registering his business in February 2022. “Upon my review of WACS and LPC letters, I noticed that both used similar verbiage throughout the letter. Both resembled a bill with requests for payment that included invoices and due dates in each letter. Initially, I thought the letters might be legitimate state or federal correspondence, but I was unsure so I conducted online research and discovered that WACS and LPC were neither Washington [Secretary of State] nor government related offices. … I believe WACS and LPC may be sending out their mailers in hopes of fooling new business registrants.”

-30-

 

Washington’s Attorney General serves the people and the state of Washington. As the state’s largest law firm, the Attorney General’s Office provides legal representation to every state agency, board, and commission in Washington. Additionally, the Office serves the people directly by enforcing consumer protection, civil rights, and environmental protection laws. The Office also prosecutes elder abuse, Medicaid fraud, and handles sexually violent predator cases in 38 of Washington’s 39 counties. Visit www.atg.wa.gov to learn more.

 

Media Contact:

Brionna Aho, Communications Director, (360) 753-2727; [email protected]

General contacts: Click here

https://www.atg.wa.gov/news/news-releases/consumer-alert-washington-state-small-business-owners-targeted-scams-requesting