For a small business owner trying to reach customers, advertising in an online directory might sound like a good idea. But there are also scammers out there looking to take advantage of these businesses by charging them for directory listings that never materialize. Just ask the victims of two “directory” operators that allegedly bilked millions of dollars from small businesses.
The Federal Trade Commission announced today that it has put a stop to both operations, which have been charged with defrauding small businesses and nonprofits by charging them for online business directory listings they had not ordered or received.
The companies allegedly deceived consumers by using unsolicited telemarketing calls and sending bogus invoices with the walking finger image often associated with local yellow page directories.
In the first settlement [PDF] with Montreal-based Francois Egberongbe, Robert N. Durham, Sr., and 7051620 Canada Inc., the company has agreed to pay $1.7 million to reimburse consumers who lost money to the scam.
The settlement is the result of a June complaint filed by the FTC and the State of Florida that initially resulted in the operation ceasing work.
In a second unrelated case, the FTC charged [PDF] Oklahoma-based Your Yellow Book Inc. (YYB), Brandie Michelle Law, Dustin Robert Law, and their father, Robert Ray Law with defrauding small businesses, doctors’ offices, retirement homes, and religious schools.
According to the FTC complaint, the defendants asked consumers to “verify” or “update” information in YYB’s Internet business directory and to pay up to $487. Many consumers paid, believing their organization had agreed to be listed in the directory.
Under the settlement, the companies must pay a $715,478 fine to be paid through the surrender of certain bank accounts and proceeds from the sale of a vehicle, boat, and camper owned by operators.
FTC and Florida Close the Book on Fraudulent Business Directory Schemes [Federal Trade Commission]
by Ashlee Kieler via Consumerist
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