FTC settles complaint against Beaverton businesses, owner
Two media production companies based in Beaverton and their owner have settled a complaint filed by the Federal Trade Commission alleging deceptive conduct.
Under the order signed by a U.S. District Court judge in Portland, the defendants — Production Media Company, The Ferraro Group Corp. and Jennifer Ferraro — are required to pay $100,000 to the FTC or toward their federal tax liabilities. If they do so within one year, the $22.2 million judgment in the order will be partially suspended.
Ferraro is president and chief executive of Production Media Company. Other related Oregon companies named in the complaint are PMC Networking and School House Folders. All three are listed by the state Corporation Division as inactive businesses, although the names are active. All listed the same address on Southwest Creekside Place in Beaverton as their place of business. State records say Production Media Company dissolved in April 2019, and the others failed to renew their registrations.
Ferraro is the sole shareholder in The Ferraro Group Corp., a Colorado company that is listed as delinquent in its annual report. Its most recent date was April 30, 2018. Its website is still soliciting ad sales, particularly for school-themed folders, and recruiting for sales representatives.
The order also requires the defendants to stop deceptive conduct, which the FTC said dates back to at least October 2014.
There was no response by The Ferraro Group to a request for comment.
According to the FTC complaint dated Jan. 23, the defendants solicited advertising placements from small businesses nationwide through telephone calls. They told businesses that for a relatively small fee, they could advertise to hundreds or thousands of prospective customers because ads would appear in folders that real estate offices and schools use to hold and transfer documents.
The complaint alleges that businesses were told that such folders would be printed soon and their ads would be "exclusive" to a folder. The FTC said either a folder with a purchased ad was never printed, or a folder was printed only after a business filed a complaint with the Better Business Bureau or a state attorney general. The agency said some folders contained ads from multiple competitors.
The FTC also alleged that when businesses complained about ads not being printed in the time allowed, the defendants generally refused to issue refunds, citing the fine print in the "reservation form" that contradicted what was said in the telephone solicitations.
The five-member commission can seek an order when it has "reason to believe" that defendants are violating or are about to violate the law — and the commission thinks it is in the public interest to act. A stipulated final order in federal court has the force of law.
NOTE: Updates with no response from the defendant to a request for public comment.
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