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Government Grants Telemarketer Settles With Attorney General
CONTACT: Elliot Burg, Assistant Attorney General, (802) 828-2153
May 13, 2008 - Vermont Attorney General William H. Sorrell announced today that his office has settled charges that Creative Fusion Concept, Inc. (“CFC”), a Canadian seller of information on government grants, and its owner, John Ioannis Pavlatos, violated the Vermont’s Consumer Fraud Act. Among other things, the company will offer full refunds to any purchaser who requests one and will pay the State $75,000.
The settlement is contained in an Assurance of Discontinuance filed recently with the Washington Superior Court in Montpelier. According to the Assurance, CFC (formerly Datalink Media, Inc.), is a Canadian corporation with offices located in Laval, Quebec. The company has also done business as Grant Services, Government Grant Funds, and Grants Now USA (www.grantsnowusa.com). Despite being located in Canada, CFC used an address at The UPS Store, 70 South Winooski Ave, Burlington, Vermont, as its return and shipping address.
Starting in April 2006, CFC offered on the internet, and through telemarketing calls to consumers who responded to CFC’s website, information on obtaining government grants, for about $300 per order. CFC’s solicitations indicated that getting a government grant using the company’s materials was easy to do, with statements like, “As long as you have a valid reason for requesting grant funding and agree to the conditions of the program the money is yours to use as you see fit.,” and “The fact is … that people from all walks of life do receive free grant money and other benefits from grant funding agencies, and you could too.”
However, according to the Assurance of Discontinuance, government grant money is actually awardable only for specific purposes, is of limited availability, and was not likely to be more easily available through the purchase of CFC’s materials. And while CFC’s materials did provide information about available grant programs, they did not directly help consumers establish eligibility, nor did CFC ever have any data to show that the use of its materials helped consumers obtain government grants.
In the Assurance, the Attorney General alleged that CFC’s advertising in the absence of factual substantiation was an unfair and deceptive practice in violation of the Vermont Consumer Fraud Act, and that CFC’s use of a Vermont return address without discharging any substantial business functions in the state also violated the Act.
Under the settlement, CFC and Mr. Pavlatos are permanently barred from engaging in any business activity in or into Vermont, and from using any Vermont address or Vermont-based fulfillment house in connection with any business. They are also required to refund in full all amounts received by any purchaser of their grants-related materials, regardless of the purchaser’s state of residence, within ten days of receiving a written request from the consumer. Finally, CFC and its owner must pay $75,000 to the State of Vermont, half as civil penalties and half to reimburse the State’s costs of investigating and settling the case.
Commenting on the settlement, Attorney General Sorrell had this advice for Vermont consumers who are interested in a federal government grant or loan: contact a member of Vermont’s Congressional delegation or a local economic opportunity or similar agency.
For more information on the settlement, call the Attorney General’s Consumer Assistance Program at 1-800-649-2424.
Website consulting provided by The National Association of Attorneys General.