FTC Charges Two With Deception in Selling Registration Services

Association of Independent Property Brokers and Agents

This story appears in the Oct. 31 print edition of Transport Topics.

The Federal Trade Commission has charged two people with using a fake government affiliation to sell registration services to truck owners and operators.

FTC said James Lamb, Uliana Bogash and their companies, including DOTAuthority.com, violated federal law by representing themselves as agents of the U.S. Department of Transportation and by failing to adequately disclose fees charged to help fleet owners comply with state and federal filing requirements under the Unified Carrier Registration system.

“The defendants have taken in more than $19 million from thousands of small businesses by sending misleading robocalls, e-mails and text messages that create and reinforce the false impression that they are, or are affiliated with, the U.S. DOT, the UCR system or another government agency,” FTC alleged in its complaint.

According to the agency, the defendants used official-sounding names and websites that included warnings of civil penalties or fines for noncompliance to trick customers into using their registration services instead of official government website services.

Customers were charged fees ranging from $25 to $550 or more on top of any government charges and, in many cases, consumers were automatically enrolled in an annual renewal program without their knowledge or consent, the complaint stated.

Commercial truck owners also were told they would have to recertify information about their vehicles every two years or deactivate their USDOT number if they’re no longer operating, FTC said. “That’s free through the Federal Motor Carrier Safety Administration. But DOTAuthority.com charged people between $25 and $200 to download the form for recertification and $200 to file for deactivation,” the agency said.

Neither Lamb nor Bogash responded to a message from Transport Topics seeking comment.

Most of the people harmed by the scam are small businesses with only a few employees and fewer than five trucks, according to FTC.

The agency said it would seek relief in the form of restitution or refunds of money paid and disengorgement of ill-gotten money for violations of federal anti-fraud statutes and a provision of the Restore Online Shoppers’ Confidence Act that specifically outlaws the use of a negative option in the sale of goods and services. A negative option is defined as a provision in which a consumer’s silence or failure to take an affirmative action to reject goods or services or to cancel an agreement is interpreted by the seller as an acceptance of the offer.

Lamb and Bogash have been engaged in such practices since at least 2012 and operated under various names, including DOTAuthority.com, James P. Lamb & Associates, DOTFilings.com and Excelsior Enterprises — all based in Fort Lauderdale, Florida, according to the FTC complaint.

A disclaimer on Lamb’s company’s website currently states that DOTAuthority.com “is a private, third-party provider offering services for a fee” and “is not affiliated with any government authority.”

A spokeswoman for the Motor Carrier Services Division of the Indiana Department of Revenue, told Transport Topics that the agency has received complaints about marketing tactics and excessive charges by a number of companies, including those operated by Lamb and Bogash, and that all of the complaints were forwarded to the FTC for action.

“It’s not an isolated incident,” said Amanda Stanley, director of public relations for the Indiana Department of Revenue.

David Owen, president of the National Association of Small Trucking Cos. in Hendersonville, Tennessee, said his organization is aware of at least one company that uses threats of fines to market drug and alcohol counseling services for truck drivers.

“It’s not a good way to do business,” Owen said.

Robert Pitcher, vice president of state laws for American Trucking Associations, said that while conduct alleged in the complaint “is at the very least reprehensible,” it is also a reflection of the difficulty many small firms face in meeting government regulations.

“The circumstances seem to indicate that the thousands of small businesses mentioned believed the federal government regulations were as complex and unreasonable as the defendants appear to have claimed they were, and that paying outside ‘experts’ was the only way those business owners could possibly comply with them,” Pitcher said.

“When an industry composed mainly of small businesses is as heavily regulated as interstate trucking, the burden quickly adds up.”

The FTC vote authorizing that the complaint be filed was 3-0. It was filed in the U.S. District Court for the Southern District of Florida. The court entered a preliminary injunction against the defendants Sept. 29.