In July 2011, the Federal Trade Commission, or FTC, filed a criminal complaint against people soliciting money for online ads that may not have even existed.
Last week, a federal judge ordered the con artists to pay back more than $10 million to the companies they defrauded. It was the latest example of what’s called the yellow pages scam, where crooks bill businesses for ads they say will run in online yellow pages listings but never do.
The FTC complaint alleged that the scam originated in Palma de Mallorca, Spain. The scammers sent unsolicited faxes to small businesses, doctors’ and dentists’ offices and churches in the United States, Canada and Australia. The FTC says the fraudulent companies operated under the names Yellow Page Marketing B.V., Yellow Page B.V., Yellow Page (Netherlands) B.V., Yellow Publishing Ltd., Yellow Data Services Ltd. and possibly others.
The federal judge agreed with the FTC’s claim that the scammers made false representations that they had pre-existing business relationships with the people they sought to rip off. They also claimed falsely that they published, or were affiliated with companies that published, local yellow pages directories.
The FTC said it had received hundreds of complaints from consumers that had received the phony faxes, leading them to believe their listings already appeared in the local yellow pages directories. The faxes appeared to be invoices, telling the consumers to send more than $1,000 to an address on Park Avenue in New York City. The FTC said consumers who tried to cancel were targets of “threatening and intimidating collection tactics.”
Under a temporary restraining order last year, the FTC intercepted and opened letters to the New York address. They contained more than 800 checks totaling over $460,000 dollars. The FTC determined that it would be in the consumers’ best interest to destroy those checks. The commission sent letters to affected consumers advising them of that action; it also provided them with information about the scam (online at http://business.ftc.gov/documents/alt019-when-yellow-pages-invoices-are-bogus).
The FTC warns consumers that what appear to be invoices may contain the words “yellow pages” and the walking fingers logo, neither of which is copyright protected. Some of those solicitations may also contain what appear to be rebate or refund checks. If you get such a mailing, read carefully — if you cash such a check, you may be billed monthly for something you don’t want (such as online access or a directory listing).
Postal inspectors remind us that, if a solicitation looks like an invoice or bill, it must contain one of two disclaimers. Both contain the phrases, “you are under no obligation [to pay anything]… unless you accept this offer.” The FTC’s Bureau of Consumer Protection advises, if you receive such an offer:
• Call your local yellow pages publisher to see if it’s aware of the solicitation.
• Ask for a copy of a previous directory edition.
• Ask for the online directory’s Web address; call advertisers to see if their listing was a good buy.
• Ask the publisher for details in writing on where and how the directory is distributed, how often it’s published and what the circulation figures are.
• Check with the Maine Department of Professional and Financial Regulation to see if any complaints have been filed about the publisher.
In March, the Ontario Superior Court of Justice issued over $10 million in monetary penalties for similar frauds perpetrated against Canadian consumers. Canada’s Competition Bureau coordinated its investigation with the FTC, the Australian Competition and Consumer Commission and the U.K. National Fraud Intelligence Bureau.
Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email firstname.lastname@example.org.