Washington State 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.
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 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.
According to the Attorney General’s Office, the 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:
• Searching for “WA Certificate Service” brings up a warning from the Secretary of State on misleading letters asking for fees and contains a sample letter from the company.
• CA Certificate Service has an “F” rating and Labor Poster Compliance has a “D+” rating from the Better Business Bureau.
• The Better Business Bureau also has an open alert for scammers asking people to pay for free posters related to labor laws.
Anyone 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.
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