WASHINGTON, D.C. — The U.S. Department of Justice and the Federal Trade Commission, joined by the state of Illinois, have sued Chicago-based Premium Home Service and its owner, alleging the company created thousands of fake online listings and fabricated reviews to mislead consumers seeking local home repair services.
The civil complaint, filed in the U.S. District Court for the Northern District of Illinois, alleges the company operated under dozens of fictitious business names and used fake addresses, misleading consumers into believing they were hiring established local contractors.
Federal regulators said the alleged scheme diverted tens of thousands of consumers searching online for services such as plumbing, electrical repair, heating and cooling work, and garage door repairs.
According to the complaint, Premium Home Service, operated by Illinois-based B.E.S.T. GDR LLC, created online profiles for non-existent businesses using addresses tied to unrelated third parties or fabricated locations.
The lawsuit also alleges that CEO and owner Yosef Bernath posted fabricated five-star reviews to inflate ratings and suppress legitimate customer complaints.
Consumers calling listed local numbers were allegedly routed to call centers located elsewhere, including the Philippines, according to the complaint. Regulators said customers were frequently promised technician visits that either never occurred or were carried out by unlicensed or unqualified workers.
The FTC and Illinois authorities allege the conduct violated the FTC Act by misrepresenting the company as a local business and by using deceptive reviews. The complaint also cites alleged violations of the FTC’s Reviews and Testimonials Rule and the Gramm-Leach-Bliley Act, which prohibits obtaining consumers’ financial information through false or fraudulent statements.
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said the alleged conduct harmed both consumers and legitimate businesses.
“Premium Home Service’s use of fake business profiles and reviews violates federal and state laws, harming consumers and businesses,” Mufarrige said in a statement.
The FTC voted 2-0 to refer the case to the Justice Department for filing, according to the agency.
The case was filed on behalf of the FTC by the Justice Department in federal court in Illinois.
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