SEATTLE (CN) - "Thousands of small businesses" were "deceived, misled and cheated" by Dun & Bradstreet in a "pay to play" scam that sells useless credit products in exchange for a favorable credit rating, a construction company claims in a federal class action.
O&R Construction claims Dun & Bradstreet used "pure deception" to sell small business the "CreditBuilder" line of products, by falsely claiming there was a problem with the businesses' credit reports.
"Defendants' aggressive marketing campaign features high-pressure sales tactics, including misleading form letters, emails and sales call scripts, which falsely claim that there are problems on a small business's credit report with Dun & Bradstreet, which the CreditBuilder products can remedy," the complaint states. "The defendants sell small businesses expensive products that purport to improve their credit ratings and correct problems on their reports: CreditBuilder for $799/year, CreditBuilder Plus for $1,099/year and CreditBuilder Premium for $1,599/year (collectively, the 'CreditBuilder products')."
Dun & Bradstreet maintains an extensive database of information about the creditworthiness of small business, and licenses the information to use in making credit decisions. It has more than 205 million business records on companies around the world, according to its Feb. 29, 2012 Form 10-K filed with the Securities & Exchange Commission.
Businesses must have a Dun & Bradstreet-assigned Data Universal Number System (DUNS) number to apply for a government contract, according to the complaint.
"Defendants routinely stress the importance of a DUNS number and mislead customers into believing that they can obtain a DUNS number by purchasing a CreditBuilder product. In truth, DUNS numbers are automatically generated by D&B prior to any solicitation of the customer," the complaint states.
Dun & Bradstreet trains its sales force on how to "hard-sell" credit-monitoring products by using false information, the class claims.
"After bringing the weight of the Dun & Bradstreet name to bear upon target customers, the defendants employ other unlawful and deceptive sales tactics to instill fear in the minds of target customers. As set forth below, defendants issue uniform solicitations which falsely claim that: (a) 'inquiries' have been made about the target customer's credit; (b) the target customer has an 'incomplete' credit profile with D&B; and/or (c) the target customer has a Supplier Evaluation Risk ('SER') rating of 'High Risk of Financial Stress.' Each of these claims causes a small business owner reasonable and understandable concern, especially coming from Dun & Bradstreet. In the end, defendants strong-arm thousands of small businesses into purchasing CreditBuilder products each year by falsely claiming that the products will solve the 'problem' or dramatically improve the customer's credit profile," according to the complaint.
"Sales agents are given very little information about the small businesses listed in their sales queues. Despite this lack of meaningful information about the credit profile or needs of individual target customers, defendants train their sales agents to falsely tell every target customer that there have been multiple 'inquiries' into the small business's credit profile. So universal and indiscriminate is this tactic that sales agents frequently inform brand new businesses that there have been inquiries, when the business is too young to have had any, or that a defunct business has had inquiries, when it has been non-operational long enough not to have had any."