FTC Announces Refund Checks for Victims of CPU Service Scheme

Refund checks are on the way to persons who lost money in a scam by CPU Service Inc., thanks to a successful enforcement action by the FTC.

In a May 11 press release, the U.S. Federal Trade Commission announced that it is sending out a total of $48,000 in checks to persons affected by the scam run by Oklahoma City-based CPU Service Inc.

Nearly 1,200 checks will be mailed, the Commission says. The average check amount is $40.82.

This enforcement action originated in July 2014 out of a separate yet highly similar scheme run by CPU Service owner Robert Ray Law.

According to the FTC, Law allegedly sent out fake invoices demanding payment for unwanted listings in an online directory called Your Yellow Book. These invoices allegedly targeted small businesses, doctors’ offices, retirement homes and religious schools across the country.

The invoices prompted the recipient to “verify” or “update” their directory information, even though the target businesses had no previous business relationship with Your Yellow Book.

Thousands of small businesses across the country received these fake invoices. The invoices showed the recognizable “walking fingers” logo associated with the Yellow Pages phone directory. The invoices demanded payments as high as $487.

Many recipients paid these invoices, the FTC says, on the assumption that their business had legitimately agreed to be listed in Your Yellow Book. Some were allegedly told they would have to pay a fee to cancel the listing.

After many invoice recipients filed complaints with the FTC and the Better Business Bureau of Central Oklahoma, the FTC brought this enforcement action in federal court against Law, Your Yellow Book, and two other named defendants in the summer of 2014.

Within a few months, the court issued an order barring Law and Oklahoma City-based Your Yellow Book from the directory business. But that court order apparently didn’t stop Law. He later created CPU Service to run an almost identical scheme, faxing bogus invoices to almost 150,000 small businesses for online computer consulting services.

Based on that new scheme, the court held Law in contempt of its previous order in October 2015. Law and CPU Service are now prohibited from advertising or promoting any products or services via unsolicited direct mail.

The court also slapped Law with a nearly $400,000 judgment, of which $45,000 was due immediately. Law was required to pay his remaining liquid assets to the FTC.

“It’s always a win when we can put money lost to a scam back in the hands of small businesses,” according to Tom Pahl, the Acting Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to bring cases that help small businesses stay in business.”

The FTC says check recipients are encouraged to cash their CPU Service refund check within 60 days. The refund checks are being administered by Rust Consulting Inc. Anyone with questions about the refund process can direct them to Rust Consulting at 800-274-0321.