Execs Charged With Fraudulent Sales Tactics Accuse FTC of Defamation, Interference
This story appears in the April 10 print edition of Transport Topics.
Two people accused by the Federal Trade Commission of using deceptive tactics to sell registration services to truck owners and operators are fighting back, asking a federal judge to allow a counterclaim against the agency for defamation and tortuous interference.
James Lamb and Uliana Bogash are partners in four companies, including DOTAuthority.com, that collect fees to help fleet owners with state and federal filing requirements under the Unified Carrier Registration system.
In September, FTC charged Lamb and Bogash with violating anti-fraud statutes by representing themselves as agents of the U.S. Department of Transportation and by failing to adequately disclose service fees, ranging from $25 to $550 or more, on top of any government charges. The federal agency also alleges that, in some cases, customers were enrolled in an automatic renewal program without their knowledge or consent.
Lamb said FTC acted improperly and “intentionally mischaracterized” the substance of a preliminary injunction issued Sept. 29, “causing proximate and irreparable injury to the defendants’ reputations and revenue.”
In asking a judge to allow a countersuit against FTC, Lamb said the agency falsely characterized him and his partner as “scammers” and “crooks” and exaggerated their culpability by using inflammatory language in statements released to the media.
Lamb said he believes FTC acted at the behest of the Federal Motor Carrier Safety Administration in retaliation for lawsuits he brought against FMCSA challenging regulations that require freight brokers to post a minimum bond.
“The FTC action appears to have been speciously brought as retribution intended to inflict financial hardship and pain on my for-profit businesses and emotional distress on me personally,” Lamb said in a statement issued March 22. “I therefore allege conspiracy to deceive the federal court and violation of my First Amendment right to free speech.”
In an interview with Transport Topics last week, Lamb said FTC’s actions have cost them some business but that he and Bogash have continued to operate their businesses with some changes, including the use of an “enhanced disclaimer” on websites, making it more obvious that they are not affiliated with any government agency. He also has reached out to customers to give them additional opportunities to opt out of the service and posted new charts online that provide a detailed breakdown of fees.
Lamb said less than 5% of customers opted to not renew their service agreement, and most of them did so because they were no longer in business and not because they were misled.
While he acknowledged there are companies that engage in overly aggressive and possibly fraudulent marketing, especially in the area of drug and alcohol testing services, where companies target single-truck owner- operators that are not legally obligated to conduct testing because of their small size, Lamb said his companies provide a legitimate service in helping small fleets comply with government rules.
“We are equivalent to a convenience store,” Lamb explained. “The single-truck operator needs to comply with more than 700 pages of regulations. They are willing to pay some extra service fees to avoid penalties, which can be around $1,100.”
An FTC spokesman declined to comment on Lamb’s actions or on the original case against him.
