FTC targets online business listing operation
- 29 July, 2011 04:29
A U.S. judge has temporarily halted a European operation that has allegedly taken millions of dollars from small businesses, churches and nonprofit organizations for unwanted listings in online business directories, the U.S. Federal Trade Commission said.
The Spain-based operation, Yellow Page Marketing B.V. and related companies, allegedly billed small businesses and organizations in the U.S., Canada and elsewhere for online business listings that appeared to be for existing local Yellow Pages advertisements, the FTC said in a press release.
In a court order released by the FTC Thursday, Judge Harry Leinenweber of the U.S. District Court for the Northern District of Illinois ordered the company to stop the practices alleged by the FTC. The judge also froze the defendants' assets.
Since 2009, the defendants have sent unsolicited faxes to churches, doctors' and dentists' offices, and local retailers in the United States, Canada, Australia and possibly other countries, the FTC said. Each fax sent to a U.S. business or nonprofit includes a name such as YellowPage-Illinois.com, depending upon the location of the organization, and a logo similar to one commonly associated with local yellow pages.
The faxed forms suggested the organizations have a pre-existing business relationship with the defendants, when they didn't, the FTC alleged. The forms, containing a Yellow Page ID number, instructed the recipient to update information about the organization and fax the form back by a deadline.
Fine print at the bottom of the form told the recipients that the faxes were a solicitation for new business and that, by returning the form, they were ordering an $89-per-month, two-year registration in the defendants' online directory, the FTC said.
Many organizations did not read the fine print, but signed and returned the form, believing they were updating their local Yellow Pages listing, the FTC said.
After returning the form, organizations received a faxed invoice seeking payment of US$1,068 for one year of listings, the agency said. The defendants often told organizations that tried to cancel the service that the cancellation period had expired and they intended to enforce the contract. Organizations refusing to pay received faxes seeking late fees and threatening to refer the alleged debts to a collection agency and harm their company's credit rating.
Some organizations paid the defendants to "end the harassment," the FTC said.
Yellow Page Marketing B.V. did not immediately respond to an e-mail requesting comments on the FTC complaint. However, the company, in a note on its North American websites, said it has been the victim of a scam.
"We have been advised that there are persons engaged in fraudulent phishing activities and that they may have 'spoofed' our web sites and may have been making demands for money," the company said. "Please note that any request for payment will not be made through an e-mail where you are asked to click on a link. Yellow Page Marketing B.V. or its associates would not send a request for payment in this manner."
In conjunction with the FTC's case, the Canadian Competition Bureau also filed a lawsuit against the operation.
Defendants in the FTC case are Jan Marks, Yellow Page Marketing B.V., Yellow Page (Netherlands) B.V.; Yellow Publishing, and Yellow Data Services.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is email@example.com.