One Michigan company has made millions of dollars soliciting small businesses in Michigan and elsewhere despite decades of complaints from consumer advocates and attorneys general.
MichMash hosts Jake Neher and Cheyna Roth talk with MLive reporter Emily Lawler, whose new podcast “Mandatory” dives into that story and what it says about consumer protections in Michigan and beyond.
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Lawler delves into the project with a big question on her mind — are these business dealings a scam? The three brothers Joseph, Steven and Thomas Fata are known for sending a series of mailers to people and companies, especially small businesses, offering them services that made it sound like they needed — but really didn’t.
“You might get a mailer that says, hey, you have to post this poster, you’re legally required to notify your employees of this,” Lawler says. “Or, you should keep corporate records, here’s how you do it.”
“So, sort of routine business tasks that you get this letter reminding you to do, asking you for money. And what some people say is that they don’t realize that it’s not the state asking them to do this, or a regulatory agency. And it’s actually this private company that’s selling you a product, either a product or a service. And sometimes people don’t realize that that’s not mandatory.”
That realization that what they were being sold wasn’t mandatory has led many people to report the company to state agencies across the United States. But was it a scam? They were indeed sending people the products that they purchased, but the reasons people would buy them were based on less than upfront explanations.
“For example, if they’re selling you a hand-washing poster that might not be required at all, and they might be making you think that it was required,” says Lawler.
“It seems like attorneys general, nationally are sort of playing whack-a-mole. One of these ideas crop up, they beat it down. It crops up again.” —Emily Lawler, MLive
“They got in trouble in a couple of states for that — or I shouldn’t say they had gotten in trouble — but they signed assurances of voluntary compliance or assurance of discontinuance or agreeing to change some of their practices around the hand-washing posters. But they’ll actually send you a poster. If you buy a poster, you’re going to get a poster.”
The Michigan brothers have a legitimately organized business through the Licensing and Regulatory Affairs Department (LARA) in the state of Michigan. The Michigan Attorney General in 2015 tried to shut down the company in a lawsuit and failed.
And scams in general are something that attorneys general across the nation are trying to clamp down on, Lawler says.
“I talked to a lot of consumer protection experts and attorneys. And to some extent, it seems like attorneys general, nationally are sort of playing whack-a-mole,” she says. “One of these ideas crop up, they beat it down. It crops up again.”