Renewal letter a ruse, officials say.
Business owners beware: If you get an official-looking letter citing state law and warning that your state business registration will soon expire, be sure to read the fine print.
There's a fair chance that the letter comes not from the Corporation Division of the Oregon Secretary of State, but rather from an outfit called Assumed Business Name Renewal Service that offers to renew business registrations - while charging a hefty service fee of $50 or more on top of the state's fee of $50.
The Secretary of State's Office and the Attorney General's office have investigated the company's practices and determined that it is not violating state law. But they urge business owners to reject the solicitation. Those who fell for it should demand a refund, state officials say.
"It's not illegal, but we don't like it," said Peter Threlkel, who directs the Corporation Division for the Secretary of State. "They're really preying on the unsuspecting."
Assumed Business Name Renewal Service sends its forms out to businesses five or six months before their two-year business registration expires. The Secretary of State sends out its own reminders, but state law prohibits them from doing so more than 60 days before a registration expires, Threlkel said.
"They're in the mailbox first and people have time to look at these, and they don't read the fine print," he said of the company's mailings.
The fine print states: "This service has not been approved or endorsed by any government agency, and this offer is not being made by an agency of the government. The fee for this service is not required to be paid by or to any government agency."
Lavona Mather, owner of a Eugene landscaping business, admits that she missed the fine print when she got a letter from the company earlier this month. She was surprised the renewal fee was $100, up from the usual $50, but went ahead and sent in a check for $100.
"I naturally thought it was our registry renewal," she said. "I probably should have questioned it more, but it didn't dawn on me it was something like that."
Only after she got the actual notice of registry renewal from the Secretary of State did she figure out that something wasn't right. She called the company back last week and was told she would get a refund.
She called the company's letter "very misleading."
Since Assumed Business Name Renewal Service started operating in Oregon in 2006, the Attorney General's Office has received 97 complaints from business owners.
Most complaints come from owners who didn't fall for the come-on, but wanted state regulators to know about it, said Jan Margosian, spokeswoman for the attorney general's consumer protection division.
The Secretary of State's office has tried to put a stop to the practice, consulting with state legislators and state attorneys.
But Oregon's constitution extends the right of free speech to commercial speech, Threlkel said.
The attorneys concluded that "anything we would try to do (to stop the practice) would really impinge on the constitutional protections of commercial speech."
The firm's letterhead lists a Keizer address. Threlkel said the address is for a business that acts as a mail drop for the San Diego-based corporate parent, Renewal Services Inc.The company president, Thomas Litchfield, did not return telephone messages left by The Register-Guard.
Renewal Services Inc. has run afoul of regulators in at least one other state. In 2005, the Florida Attorney General's office sued Renewal Services Inc., doing business as Corporate Compliance Center, and Litchfield.
The suit alleged that the company's forms mimicked official state forms, and used deceit to get businesses to pay $100 for a "worthless service."
The state reached a settlement with Litchfield in which he agreed to pay the state $15,000, stop sending out misleading advertisements that appeared to be from a government agency, and stop mis-stating Florida law.The agreement required the company to send out letters to every business that had used the service and offer a refund.
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|Title Annotation:||Business; Businesses are receiving offers that charge double the normal fee to renew a name registration with the Secretary of State|
|Publication:||The Register-Guard (Eugene, OR)|
|Date:||Feb 26, 2008|
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