Good news for small businesses around the world; a European-based company that has bilked millions of dollars out of small businesses for unwanted business directory listings has been shut down by the U.S. Federal Trade Commission.
The FTC and the Canadian Competition Bureau have launched simultaneous lawsuits against Yellow Pages Marketing B.V. , accusing the company of deceptive marketing practices and demanding that the company cease operations, pay monetary penalties and pay restitution to the scam's victims.
The Australian Competition & Consumer Commission recently won a court case against the accused company that imposed penalties of $2.7 million, court costs, and voided all the company's contracts.
How did the scam work? Yellow Pages Marketing B.V. sent unsolicited faxes to small businesses through the United States, Canada, and Australia which had symbols on them that closely resembled the well-known 'Walking Fingers' trademark of the Yellow Pages Group, deceiving businesses into believing that the faxed forms came from Yellow Pages Group.
The forms faxed asked businesses to update their contact information for an online business directory listing but by doing as requested and returning the form, businesses were actually committing to a two year contract for the directory listing, which cost $1,428 per year, buried in the fine print. (The cost of the directory listing varied by country.)
Hopefully the concerted international court action to shut down this directory listing scam hydra will send a strong message that such companies can't operate with impunity in the countries involved and that significant penalties and demands for restitution can be levied against them.
I guess the main message for small businesses, though, is to be vigilant and carefully scrutinize whatever invoices or requests for information that cross their desks.
Read more about the fake 'Yellow Pages' small business directory scam:
- From Canada's Competition Bureau
- From the U.S. Federal Trade Commission
- From the Australian Competition & Consumer Commission
Read more about Business Scams:
Most Popular Articles | Newsletter | SB Canada Forum | RSS Feeds | Follow Me on Twitter