Lawsuit comes as City Attorney’s Office launches new consumer protection efforts
SAN FRANCISCO (March 9, 2023) — San Francisco City Attorney David Chiu announced today that he has filed a lawsuit against a direct marketing company, Personnel Concepts, and its parent companies for impersonating government actors in order to trick small businesses into buying its products.
The company sells workplace compliance posters and sends solicitations designed to look like government communications to California businesses. The solicitations imply that businesses must purchase the products in order to comply with labor laws or face penalties. Yet, the products Personnel Concepts provides do not include all necessary labor notices, depriving workers of valuable information on their rights in the workplace.
“Running a small business in our state is difficult enough, and these scams make it that much harder,” said City Attorney 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.”
This new lawsuit comes during National Consumer Protection Week and just as the City Attorney’s Office launches a new consumer protection web portal and hotline. The Office is seeking reports of businesses that deceive or defraud consumers, as well as of property owners that maintain properties in substandard conditions or violate housing laws.
“Consumer protection has been a top priority of mine since first taking office,” said Chiu. “I am excited our office has set up this new web portal and hotline to hear directly from the public about issues facing consumers. I am hopeful this will lead to future actions to protect the public.”
Background
Businesses are required to post workplace notices that inform employees of their rights under local, state, and federal labor and employment laws. While it is legal to sell these postings, governments make them available to businesses free of charge. The required workplace notices differ by the location, size, and nature of a business, and thus, businesses should carefully scrutinize whether commercially-produced labor posters satisfy all applicable requirements.
Personnel Concepts is a California-based company, with parent companies in California and Wisconsin, that sells workplace compliance posters and other related products. The company sends deceptive solicitations designed to look like government communications to California businesses. The solicitations include an invoice for a “All-On-One California & Federal Labor Law Poster” and imply that purchase of the poster is required to comply with labor laws. It falsely threatens that businesses that do not comply could face over $37,000 in fines.
In their solicitations, Personnel Concepts claims that their posters fulfill all notice requirements, but their products do not actually contain all required postings, which means that employees are not being informed of all their rights. For example, Personnel Concepts’ poster does not include any industry-specific or occupation-specific wage order.
Once a business purchases the poster, Personnel Concepts then begins an aggressive telemarketing campaign falsely insisting that additional posters and annual subscription packages must be purchased to comply with the law and avoid fines. If businesses refuse to pay the invoice, dispute the charges, or attempt to decline the products and services, Personnel Concepts demands payment through a collection agency.
The lawsuit, which was filed on behalf of the People of the State of California, alleges this pattern of impersonating government agencies and deceiving businesses owners violates several California laws. The People are seeking penalties, restitution for impacted businesses, and injunctive relief to ensure additional businesses are not harmed.
The City Attorney’s Office encourages any business owners who may have had relevant interactions with Personnel Concepts to contact the Office through its web portal and hotline at (415) 554-3977.
The case is People of the State of California v. Brady Corporation, et al., San Francisco Superior Court. The complaint can be found here.
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