Judge Orders $49 Million Fine in Directory Listing Case

A federal judge has ordered two individuals to pay more than $49 million for their role in a Canada-based scheme that allegedly duped American businesses into paying for business directories and listings they did not order, according to the Federal Trade Commission.

Bernard Fromstein and Judy Provencher are the remaining defendants in the 2006 Datacom Marketing Inc. case, which was part of an international effort against cross-border fraud, according to the FTC.

In that earlier case, the FTC charged Datacom Marketing Inc., Datacom Direct Inc. Fromstein, Provencher, Paul Barnard, Judy Neinstein, and Stanley Fromstein with operating call centers in Toronto and Montreal that allegedly falsely represented that: they had an existing business relationship with the call recipients; that they had agreed to purchase business directories or listings and consumers owed money for business directories and/or listings in business directories, the FTC said.

Unlike their co-defendants, the pair did not agree to settlements of the charges against them, said the Commission.

Under a default judgment entered against Fromstein and Provencher on May 7, they are barred from misrepresenting that consumers have a preexisting business relationship, that consumers have agreed to purchase business directories or listings in directories, or that consumers owe money for business directories or listings in directories, according to the FTC.

The pair are also barred from violating the Telemarketing Sales Rule, and from misrepresenting, or failing to disclose, any fact material to a consumer’s decision to purchase or use any product or service. In addition, during outbound telephone calls, they are barred from failing to disclose the seller’s identity, the call’s purpose is to sell goods or services, and the nature of the goods or services, continued the FTC.

The order bars them from selling, renting, or otherwise disclosing personal information about anyone whose information was obtained in their alleged scheme and from benefiting from that information. They are also barred from collecting payment for any business directory or listing on accounts established before the order was issued, said the Commission.

The FTC added that this order also waives all of their rights to approximately $470,000 worth of uncashed checks from consumers.

The order includes a $49,235,402 judgment against Fromstein and Provencher for consumer injury, as well as record-keeping provisions to allow the FTC to monitor compliance with the court’s order.

This case is on file at U.S. District Court for the Northern District of Illinois, in Chicago.