Calif. company settles over mailings

by Nick Rees |
Mar. 11, 2011, 2:24am


RALEIGH, N.C. (Legal Newsline) - North Carolina Attorney General Roy Cooper announced on Friday that a California company that allegedly sent misleading mailings to North Carolina businesses is required to permanently change its business methods.

Cooper and North Carolina Secretary of State Elaine Marshall filed a lawsuit against Corporate Services Inc., Compliance Services and Selwyn J. Monarch, the companies' owner, in 2009 alleging that they misled North carolina businesses into believing that they had failed to comply with state laws on taking and filing corporate minutes.

Corporate Services allegedly sent mailings giving the impression that the company was a state agency and used a downtown Raleigh post office box as its return address.

Businesses were directed by the letters to pay $125 and provide information on corporate minutes by a certain date, Cooper says. Laws in Chapter 55 of the North Carolina General Statutes were referenced in the letters, Cooper says. Those laws are enforced by the North Carolina secretary of state, which does not issue letters like the ones sent by Corporate Services. The agency also does not collect fees from corporations that fail to keep or file corporate minutes, Cooper says.

"We acted fast to keep North Carolina businesses from losing money to this scheme," Cooper said. "Within 36 hours after these mailing were reported to us, we asked a judge to stop them and now we have an agreement that permanently does just that."

Under terms of the settlement, Corporate Services must clearly disclose in letters that it is an offer for solicitation of commercial services and is not approved or endorsed by a government agency. All of its envelopes mut also include language that says "This is not a government document."

Future mailings or envelopes must also display a street address or post office box in Raleigh or Research Triangle Park, N.C. The sender's actual name must also be included.

Under terms of the settlement, future mailings must not give the impression that they were sent by a government agency or that failing to respond will result in penalties or enforcement action. Seals or other emblems resembling government agencies must not be used in these mailings.

Additionally, future solicitations cannot contain the words "notice," "notice date," "mandatory," "warning," "requirement," or "required" in the title or heading of the document and no reference to North Carolina law may be made to foreign corporations registered to do business in North Carolina.

No solicitations will be sent between February 15 and April 30 of each year as a means of preventing confusion that responding to the letters would satisfy the requirement to file an annual report or pay annual filing fees with the secretary of state.

Finally, Corporate Services must pay the state $25,000.

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