DES MOINES — A Polk County judge has ordered a Quad Cities-based telemarketing operation to pay nearly $2.6 million and permanently banned it from doing business after finding the operation had defrauded small businesses across the nation.
Polk County District Judge Heather Lauber ruled Tuesday granted Iowa Attorney General Tom Miller’s request for summary judgment against owner Alphonso “Al” Barnum of Davenport, several of his associates, and 10 companies.
“We’re pleased that the judge found clear and convincing evidence to penalize Barnum and his partners,” Miller said. “He refused to respond to our requests at every turn, but our Consumer Protection Division persisted in bringing the defendants to justice.”
In December 2018, Miller sued Barnum and the others, alleging the defendants violated the Iowa Consumer Fraud Act by using deception, confusion and high-pressure tactics purportedly to sell advertisements for direct-mail pieces and promotional items, such as high school sports posters and city information guides.
Judge Lauber found that in many cases, the companies delivered no products. Barnum’s agents also called businesses and falsely told consumers that they had previously agreed to purchase advertising and that their accounts would be sent to a collection agency unless the consumers paid that day. The consumers would give the defendants credit card or bank account numbers as a result.
Defendants then made unauthorized charges against the victims’ accounts, including creating checks that were run through victims’ bank accounts, the judge found. Between January 2016 and January 2019, the defendants’ bank accounts received more than $1.94 million in deposits taken from consumers, according to the ruling.
“Even after the state initiated this lawsuit, the defendants continued to engage in unlawful practices,” Lauber wrote.