Out-of-state companies that pretend to be homegrown Minnesota businesses will be guilty of deceptive business practices, under a new law.
Sponsored by Rep. Steve Simon (DFL-St. Louis Park) and Sen. Sandy Pappas (DFL-St. Paul), the law makes it illegal for companies to misrepresent their location in phone directories, print ads and on the Internet.
The law is intended to address a kind of scam in which out-of-state companies take out ads pretending to be Minnesota-based companies. The companies overcharge customers who place orders, transfer the orders to actual Minnesota companies and then keep the difference as profit. Practitioners have targeted the floral and locksmith industries in particular.
The law generally states that a business misrepresents its geographic location if: they represent themselves to be at a location where there is not at least one owner or employee regularly performing services; and set up a local phone number that routinely routes calls to out-of-state call centers.
Signed April 15 by Gov. Tim Pawlenty, the law takes effect Aug. 1, 2010.
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