Direct marketing company Personnel Concepts is facing a lawsuit after allegedly impersonating the government to defraud small businesses, San Francisco City Attorney David Chiu announced Thursday. Chiu’s office alleges that the company and its partners designed solicitations for its products, which are workplace compliance posters, to look like government communications.
According to the lawsuit filing, the solicitations informed businesses that they must buy the company’s products to comply with labor laws or face fines of up to $37,000. The lawsuit alleges that their posters do not actually contain all of the state’s required labor notices, including notifications about paid sick leave or wage orders, and deprive workers of their rights in the workplace.
Chiu’s office further alleges that once a business purchased a Personnel Concepts poster, they would be called repeatedly and told they have to buy more posters or an annual subscription package to continue to comply with California law. If a business did not pay the invoice, disputed charges or attempted to decline products, Personnel Concepts would demand payment via a collection agency, according to Chiu’s office.
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“Running a small business in our state is difficult enough, and these scams make it that much harder,” said Chiu. “Impersonating government is a serious offense that not only defrauds consumers but also erodes public trust in government. We are seeking restitution for businesses that were harmed and asking the Court to put an immediate stop to this practice.”
Filed on behalf of Californians, the lawsuit seeks penalties, restitution for victims and injunctive relief. Any small business owner who interacted with Personnel Concepts is encouraged to contact Chiu’s office’s recently launched consumer protection hotline at (415) 554-3977.
Personnel Concepts was not immediately available for comment.
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