Refunds Recovered for NC Small Businesses Tricked into Paying Fees

A total of 345 North Carolina small businesses and nonprofits were subjects of the scam

Refunds Recovered for NC Small Businesses Tricked into Paying Fees
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July 22, 2016

Small business owners in North Carolina may be in line for an unexpected windfall.

Wake County Superior Court Judge Donald Stephens has approved a consent judgment barring Corporate Records Service (CRS) from engaging in misleading or deceptive trade practices in North Carolina. The company will also have to pay refunds to small business owners that it scammed into paying unnecessary fees.

According to North Carolina Attorney General Roy Cooper, the deceptive mailings directed businesses to complete a form and submit it along with $125 in order "to satisfy the annual records requirement for your corporation." The letters instructed businesses to send their forms and fees to an address in Raleigh, which turned out to be a rented mailbox.

A total of 345 North Carolina small businesses and nonprofits responded to the CRS mailings.

"Small businesses are critical to North Carolina's economy, and they don't deserve to be tricked out of their hard-earned money," said Cooper in a written statement. "My office took action to make sure business owners get their money back."

CRS and co-owners Steven Fata, Thomas Fata, and Joe Fata must comply with strict rules for any future mailings, including a ban on the use of certain words or symbols that make it appear that a letter is urgent or that CRS is connected with the government.

In addition to the refunds to business owners, the defendants are required to pay $10,000 to North Carolina to cover litigation costs and consumer protection efforts.

"Most businesses work hard to comply with the law, and unfortunately scammers try to take advantage of that by pressuring them to pay fake fees," Cooper said. "Avoid these scams by reading invoices and other requests for money carefully before you pay."

To check on the status of a corporation, limited liability company, or other business entity registered at the North Carolina Secretary of State's Office or learn about records businesses are required to keep, visit sosnc.gov or call the Corporations Division (888) 246-7636.