In three new complaints filed in Florida and Washington federal courts, the Federal Trade Commission requested a halt to the operations of Canada-based telemarketers that scammed small businesses for unwanted “Yellow Pages” directory listings.
Churches, nonprofits, local government agencies, and small businesses were the targets of National Business Advertising, Your Yellow Pages, OnlineYellowPagesToday.com, and related individual defendants, the FTC said. The scam – which the agency claimed earned the defendants millions of dollars – operated by sending targets deceptive invoices for unordered business directory listings.
Some recipients simply paid the bill. According to the agency, those that challenged or disputed the invoices (which ranged from $200 to $1,800) were subject to a variety of harassing collection tactics in which the defendants acted as debt collection companies or played recordings that claimed to prove that the business actually authorized the listing. According to the FTC, the recordings sounded as if they were either doctored or simply reflected that an employee confirmed the contact information for the business and did not agree to any services. And in some cases, the directory listing did not even exist.
The FTC alleged that the defendants ran afoul of the FTC Act by making three different misrepresentations: (i) the existence of a preexisting business relationship with the target companies; (ii) that the businesses had agreed to buy directory listings; and (iii) that the companies owed them money.
In two of the suits, federal judges in Florida entered temporary orders halting the operations of National Business Advertising and Your Yellow Pages and freezing their assets. OnlineYellowPagesToday.com fared slightly better in the Washington federal court, where it avoided the asset freeze but was ordered to stop conducting business.
All the complaints seek permanent injunctions against the defendants as well as consumer redress and civil penalties.
To read the FTC complaints against the defendants, click here.
Why it matters: While telephone directory listings certainly don’t have the following that they used to, directories remain popular with scammers. In addition to the three new cases, the agency filed a similar suit last year against Online Public Yellow Pages. A federal judge in that case banned the Canadian defendants from the directory business and entered a $15.6 million default judgment. Pursuing small business scams is a priority for the FTC, even when defendants are across international borders.