Consumers cry foul as Utah company falls short
Jun 18, 2018, 10:15 PM | Updated: 10:40 pm
SALT LAKE CITY, Utah — Nancy Katebi was tired of the life on the road required by her job as a traveling nurse and was ready to set out on her own.
“I live on planes, I sleep in hotels, and I don’t get to see my husband,” she said. “I wanted to start a company so it would limit my traveling.”
Nancy Katebi hoped to secure funding to open a waxing studio.
But like many budding entrepreneurs, she had one obvious problem — money. She needed help to buy into the waxing studio franchise she hoped to launch.
“After doing a couple of searches online, I ended up with American West Commerce,” she told the KSL Investigators.
The company advertised themselves as one that helped hopeful business owners get funding by way of a business plan, credit score repair, and seeking out nontraditional lenders. They seemed confident they could help her, and Katebi ultimately shelled out $1,000 for their services.
What she couldn’t have known at the time was that the Utah-based company would later be cited by the Utah Division of Consumer Protection for a number of issues. In the citation filed in April, the state found American West Commerce — which also operated under the name Capital Finance Associates — misled consumers over the phone, illegally offered to repair customers’ credit and failed to give refunds.
“Misrepresentations, failure to disclose things to consumers, failure to disclose things to the division,” Daniel O’Bannon, director of the Utah Division of Consumer Protection summarized. “This business was not being upfront…”
Katebi received a business plan from American West Commerce, but said it was “sloppy” and little more than a list of 20 questions, which she said was not relevant to securing any kind of financing. She said the company did not help with her credit, and no financing was secured.
Then, it became harder and harder to reach anyone at the company.
“Communication was horrible. After some time they just decided not to communicate with me,” she said. “It was then I decided to say, ‘You know what? I’m out. I don’t want any services from you guys.’ And they actually agreed to pay me my money back.”
Katebi said she signed an agreement to end her contract, confirmed American West Commerce had received it and then waited. She said more than two months passed and no refund ever came. That’s when she reached out to the KSL Investigators.
“People need to know that this company should not be operating here in Utah,” Katebi said.
Nathan Jorgensen is the former president of American West Commerce.
Nathan Jorgensen, former president of American West Commerce, said he issued over $100,000 in refunds, but that he and his former business partner, James Hyatt, ultimately had such disagreements over refunds that they parted ways. His departure further complicated matters.
“I had sent settlement agreements to people promising them refunds, and when I separated from the business my ex-business partner was supposed to take care of it,” Jorgensen said. “He never did. And those people ended up complaining to the Division of Consumer Protections.”
Jorgensen said the company was often successful in helping clients, but that he could see how the various issues in the citation “makes it look really bad.” He said that while they weren’t able to find financing for everyone, they were able to secure funding for 200 customers over the course of two years.
“We can’t say that we didn’t help,” he said. “We tried our hardest. We helped a lot of people. For people that had a horrible experience and they’ve complained, it’s more of a function of I promised them a refund and it never got taken care of.”
Jorgensen said this was not intentional, nor was the difficulty clients faced trying to track the company down.
“It definitely was not by design,” he said. “I think it was just more chaos, not updating records where we should.”
During her experience, Ketabi posted a negative review online for the company, and received responses from other would-be business owners nationwide who echoed her experience.
Joe Gibb hoped American West Commerce could help him get funding to start a debt collection agency.
Across the country in Buffalo, New York, Joe Gibbs was one such fellow unsatisfied customer. He was looking for help getting a debt collection agency off of the ground, but was only met with rejection by banks.
A web search also led Gibbs to American West Commerce.
“This company tells you from moment one that they have hundreds of banks they deal with and you’re guaranteed funding,” Gibbs said. “They told us that we were approved from zero to $150,000, anywhere in there, we’ll have no problem getting you.”
He paid $1,250 to the company and was sent a business plan. He said that was as far as the promises were delivered.
“We never received a dime,” Gibbs said.
Gibbs’ experience followed a familiar course with Ketabi’s and he, too, found others on various business review websites who shared their frustration, anger and disappointment.
“When we go through the reviews, every one has the same story,” Gibbs said. “It’s always the same.”
In a settlement agreement issued this month, the Utah Division of Consumer Protections put it plainly: “Respondents failed to deliver all or part of agreed-upon goods and services to the purchasers.”
“Anytime a consumer is paying for something and then they don’t get what they paid for, that’s a problem,” O’Bannon said.
Customers also noted that the business had multiple addresses and calls largely forwarded to voicemail machines, which at one point Gibbs said notified them of a fire.
“It said that due to a fire, their computer systems are down,” he recalled.
Jorgensen said “I don’t know of any fire,” and that those messages were recorded after his time with the company.
For his part, Jorgensen said that though he left the company, he is working with the Division of Consumer Protection to see that the promised refunds were paid.
“I just want to say sorry to people who were affected and I just want them to know I’m going to be working to make it right,” he said.
On June 8, a settlement was reached. The company was fined $5,000 and ordered to pay refunds to those who already complained to the Division of Consumer Protection and anyone else who complains within the next year.
Jorgensen is also prohibited from starting or being involved in a telephone soliciting or credit repair company for the next two years. Hyatt never responded to the citation, but while their business registration status is active, American West Commerce’s website has been shuttered.
Daniel O’Bannon is the director of the Utah Division of Consumer Protection
O’Bannon said customers should be careful whenever working with companies that want to use their personal information. He said they should verify that the companies are registered with the state and do whatever research possible before becoming involved.
“Look online and see what is the reputation of this company,” he said. “What’s the history of this company? Is it a company that just barely formed, has it been around? Are there positive reviews?”
For those looking to launch a small business, the U.S. Small Business Association also offers various tips on their website, including how to secure funding. They also provide information on what local resources are available to prospective business owners.