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Small Business
FTC files fraud charges
September 29, 2000: 2:43 p.m. ET

Agency files against three companies accused of office supply scams
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NEW YORK (CNNfn) - The Federal Trade Commission announced on Friday it has filed complaints in federal district courts against three companies it suspects are involved in office supply fraud.

"Toner-phoner" scams, as they are commonly known, generally involve unscrupulous telemarketers selling faulty office equipment such as toner cartridges to business owners over the telephone.

Using the anonymity of the telephone to their advantage, the operators talk small business owners into purchasing office equipment from them that is usually reconditioned and sold at greatly inflated prices.

Harm to small biz and legitimate office suppliers


The Federal Trade Commission has estimated that small business owners graphicand non-profit organizations, typically the targets of such scams, are taken for over $250 million a year. Fraudulent sellers also cost legitimate office supply companies about $125 million in lost revenue each year.

In many cases, scam artists call business offices and represent themselves as the business's regular supplier of toner cartridges. Often the businesses do not know they have ordered from another source until they receive bills that are much higher than their regular office supply bill or they receive faulty equipment.

Other people get taken by special low price offers or when a telemarketer tells them the cartridge is a new style and available to new customers only for a short time.

 The FTC filed complaints in federal district courts against the following defendants:

  • Pacific Office Systems Inc., based in Canoga Park, Calif.
  • Corporate Supplies Inc., based in Cumming, Ga.
  • Allstate Business Distribution Center Inc., based in Southern California.


The complaints allege the three defendants violated the FTC Act and the Telemarketing Sales Rule by pretending to be the consumer's regular supplier or to be associates of the manufacturer of the consumer's photocopier. In many instances, consumers were deceived into paying higher prices for toner they never ordered, and in some instances they paid for toner they never received. If the consumers paid the first bill, the defendants often sent and billed them for additional shipments that were not authorized. Back to top

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Federal Trade Commission


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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.