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October 11, 2016

Judgment Bars California “Toner Pirates” From Targeting Iowa Offices

Miller obtains injunction barring three Orange County operations from sending phony invoices for copier toner to Iowa offices, including those operated by libraries, care facilities and professionals

DES MOINES – Three California companies that allegedly engaged in so-called “toner pirate” schemes to deceive Iowa office employees into overpaying for copier toner that they never ordered are barred from marketing to Iowans, through a court-approved agreement with Attorney General Tom Miller.

The consent judgment and permanent injunction, entered today by Polk County District Court Judge Jeffrey D. Farrell, resolves a lawsuit brought last month by Miller’s office.

The defendants are Central Supply Center, of Orange, and owner Sandra Steinmetz; Elite Supplies, of Irvine, and owner Krystle Lester; and Central Supply Solutions, of Orange, and owner Brittany Hertsch. The three owners are related—Steinmetz is an aunt of Lester and Hertsch, who are half-sisters.

The lawsuit had accused the defendants of making calls and sending invoices to Iowa offices as part of their schemes to collect money, in what Miller calls “classic toner pirate scams.” The defendants targeted libraries, care facilities, professional offices, and other businesses across the state.

Complaints to the Consumer Protection Division revealed a pattern:

  • A cold call to a targeted library or business insinuates that the call is coming from the office supply company that provides toner for the office copier and other supplies. The staff member who answers the phone is asked to “confirm” the make and model number from the front of the office copier, and provide the name of the staffer in charge of ordering supplies.
  • If the staff member cooperates by supplying the requested information – and all-too-often they do – the caller sends an invoice for copier toner, billing at three or four times the retail price. At a glance, the invoice looks legitimate – it has the right make and model, and even names a supposed “contact person” in the targeted office.
  • If the target pays the grossly-inflated bill, the toner pirate attempts to repeat the billings, sometimes resulting in thousands of dollars in losses over time.

“Schemes like these tend to exploit offices with new employees, organizations staffed by volunteers who answer phones, and situations where an employee who orders toner doesn’t also handle bookkeeping,” Miller said. “Institutional victims of these schemes may end up paying hundreds of dollars for only $60 worth of toner.”

Court Injunction Bars Marketing to Iowans
The permanent injunction bars the defendants from targeting Iowans with toner schemes, or from engaging in any telemarketing or sales to Iowans.

The consent judgment also requires the defendants to honor refund requests from any Iowans who lost money from the schemes.

“Fortunately, we think we acted before these operations were able collect money from any victims in Iowa,” Miller said. “But if there were losses and any victims contact us, these defendants must provide full refunds.”

General Cautions
Miller cautions Iowans that every office—public or private—is a potential target for this scam, and that printers, as well as copiers, can be the focal point.

  • Offices should periodically remind employees of how toner pirates work, to prevent being victimized.
  • A change in personnel or job duties that affects receptionists or product ordering responsibilities can create a window of special vulnerability.
  • Miller also notes that a simple safeguard could foil the scammers, namely, affixing a warning on the copier, next to the make and model number, along these lines: “Do not provide this make or model number to callers; report any such requests to your supervisor.”

For more information or to file a complaint, contact the Consumer Protection Division through the Attorney General’s website at www.IowaAttorneyGeneral.gov or email directly to consumer@ag.iowa.gov.  Consumers can also call the Consumer Protection Division at 515-281-5926, or outside the Des Moines area, toll free, at 1-888-777-4590.

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