A fax comes through at the office looking like it’s a form to re-up your existing phone directory listing. It includes information about your business, a “Yellow Page ID number,” and a familiar “walking fingers” logo. The fax, not addressed to any particular person or department in your company, instructs the recipient to sign and send the form back by an impending deadline. Buried in fine print is the only indication the fax is really a solicitation for new business.
By returning the form, what the sender has signed your company up for — perhaps through a volunteer, a part-timer, or someone not authorized to make purchases — is an $89 per month, two-year registration in their online directory, payable a full year in advance. When you contact the company to contest the bill, you’re told the cancellation period has expired and they intend to enforce the contract. Companies that refuse to pay the unauthorized charge get faxes imposing late fees and threatening to turn the “debt” over to a collection agency. Tired of the run-around, some companies pay up just to end the harassment.
The FTC went to federal court in Illinois last week to stop this allegedly illegal practice by Yellow Pages Marketing B.V., an outfit based in Europe the FTC says has been bilking small businesses and nonprofit groups — including medical offices and churches — out of millions of dollars by tricking them into paying for unwanted listings in online business directories. The Judge granted a temporary restraining order and asset freeze. The FTC is also seeking a permanent halt to the illegal practices and money back for victims of the scam.
One notable fact in the FTC’s pleadings is the global scope of the operation. According to the complaint, the defendants operate out of Spain, use corporations based in England and the Netherlands, and direct people to send payment to a New York address. Since 2009, they’ve sent unsolicited faxes to businesses and non-profits in the U.S., Canada, Australia, and possibly other countries.
Fighting global fraud takes a coordinated effort by state, federal, and international law enforcers. That’s why the FTC worked with the Iowa AG’s Office, the Australian Competition and Consumer Commission, and the Competition Bureau Canada, which took the lead in coordinating this effort and filed its own lawsuit against the defendants.
What can your business — or church or non-profit — do to help put the brakes on operations like this?
- Read Throwing the Book at Business Directory Scams and When Yellow Pages Invoices Are Bogus to get inside info on how these scams work.
- Post copies by your phone and fax machine and share the links with employees, interns, and volunteers.
- At your next staff meeting, play this video with more tips from the FTC on spotting a B2B rip-off.