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Misleading mailer targets small business owners with fee for filing state documents

Colorado Secretary of State issues alert with red flags to look for
Misleading mailer targets small business owners with fee for filing state documents
Posted at 5:00 AM, Oct 13, 2021
and last updated 2021-10-13 08:00:11-04

COLORADO SPRINGS — News5 continues to uncover how costly misleading mailers can be for people in Southern Colorado who can't spot the red flags. In this case small business owners need to be aware of deceptive notices seeking an extra fee to file state business documents.

Whether it's about student loans, homeowner issues, car warranties, or in this case operating a business, deceptive mailers can be costly if you pay up without reading the fine print. It's why one local business owner is working with us to spread the word.

"In 2015 my dad was diagnosed with terminal cancer," said local small business owner Lauren Ferrara. "I had wanted to do an interview with him. He was this colorful Irish guy who told great stories, but I didn't do it and that was my big life's regret."

After her father passed, Ferrara decided to put together a video to honor his memory.

"Probably 30 people sat down and told stories about him," she said.

Seeing the power in these testimonies, Ferrara decided to start a small business.

"I launched Why Wait Stories and we create family documentaries," she said.

Then she said she got an official looking letter in the mail.

"Even the form looks like it came straight from a government office," Ferrara noted as she shared the letter with News5. "You see that and you think, oh, I'm late on paying my bill. I need to do this."

Many people go on to pay this company $65 to file business documents with the state, but the truth is it's something people can do on their own for a fraction of the price. It's in the fine print.

"So at the very bottom it says "The periodic report can be filed directly through the Colorado Secretary of State for the statutory fee of $10," so it's on there," said Ferrara.

Adah Rodriguez of the Better Business Bureau of Southern Colorado shares Ferrara's concern about these mailers aimed at small business owners.

"So you can work with the Secretary of State to get this service completed without paying this third party. So while this third party entity may be a legit business, they are providing unethical services," said Rodriguez.

Now our local business community is working to spread the word.

"Every small business owner that you know, just letting them know that this is happening so that your neighbor can just pause and do the research before paying a $65 fee," said Rodriguez.

The Colorado Secretary of State's Office sent out an alert about these kinds of mailers. Saying these solicitations may:

Appear similar to a government form.

Contain an official-looking seal.

Refer to a statute or quote other Acts or laws.

Imply that failing to return the form and pay a fee may place your company in jeopardy, may "pierce the corporate veil", or might cause your company's filings with the state to be non-compliant.

Contain a "Corp Number" or "Corporate Identification Number" that does not match a number given to you by a State or Federal Agency.

"Any company like this can just go and grab your information and just by them having that you assume they have a legitimate intent," said Ferrara.

If you get one of these mailers, the Colorado Secretary of State Office wants to know about it.

Any business that has received a letter that seems misleading or confusing is urged to contact them immediately by emailing sos.business@sos.state.co.us

You can also call 303-894-2200 and select option 2.

Officials may request a copy of the notice, which can be faxed to 303-869-4864. Please keep the original notice, mailing envelope and return envelope for your records.