Foreign Scammers Posing as Bona Fide Yellow Pages Reps Have Bilked Millions!
Posted 10/28/2012 by Estar Holmes
NOTE: If your business has been scammed you may take action by contacting the agencies/organizations listed at the bottom of this article.
Earlier this week, a subcontractor representing my business, South Lake Promotions, Inc., visited a client in St. Maries, Idaho, who was distraught about a bill from a Yellow Pages company demanding $300 dollars for an online listing that she didn’t order. Today, I went to see a client in Joseph, Oregon, on behalf of a bona fide telephone directory. Barely two steps in the door, he started talking about a suspicious Yellow Pages “bill” he just recieved. He showed me how it prominently displays the words “Yellow Pages,” and the familiar walking fingers logo that some of us grew up with and learned to trust as the bono fide phone book during the days of the Ma Bell monopoly.
AT&T, the creator and owner of the most famous three-fingered version of the “Walking Fingers” logo, never applied for a trademark on the logo. While they eventually received a trademark on a different version of the logo, the version with the three fingers was not considered by AT&T to be proprietary and they in fact allowed any telephone directory to use it. The popular logo achieved a remarkable 93 percent recognition in the United States.
The so-called bills display a photocopy of a short form where business owners checked and signed to ensure accuracy of their business listing. The forms duped them into thinking they came from a directory with which they had a preexisting business relationship. Every business wants their phone number correct so customers can reach them, and these two business owners are no different. They returned the forms to Yellow Pages United — a company they had no previous dealings with, but which is now demanding money.
The old adage “buyer beware” comes to mind. There is a statement on the face of the form that admits it’s not what it looks like, and that it is in fact a solicitation. Yellow Pages scammers are banking on the fact that busy managers won’t notice the fine print and pay the bogus invoices along with legitimate ones.
CAN 14 MILLION PEOPLE BE FOOLED?
How many people have fallen prey to this trick and paid the money? If you can believe the “About Us” section on the website yellowpagesunited.com, claims more than 14 million “subscribers.” At roughly $300 a pop for the “basic listing,” these people have bilked a minimum of $4,200,000,000 from busy, hardworking, small business owners.
This isn’t a new problem. An article written on a business blog in Aug. 2009 states in big letters: “Yellow Pages United: Scam Alert!” Here’s what blogger Erin Pheil says:
“Twice now in the past three weeks, the people behind a grossly unethical scam have attempted to steal my money. It’s my hope that sharing information about this scam will keep local businesses from unwittingly handing over their hard-earned money to the company behind this scam – Yellow Pages United.”
“If you ever receive a phone call from someone asking to verify your phone book or online yellow pages listing, HANG UP IMMEDIATELY.” – Blogger Erin Pheil (Emphasis Mine)
Sometimes the Yellow Pages United people call on the telephone, Erin says, saying they want to verify your phone book listings. She suggests anybody who receives such a call should hang up immediately. “A quick Google search shows how Yellow Pages United has taken these recorded phone calls, cut and mixed them, then later played them back to business owners so it sounds as if they have actual proof of the business owner agreeing to additional services or upgrades.”
In 2008, Oregon Attorney General Hardy Myers issued a warning about misleading telephone solicitations from that OYP Group of Montreal, Canada, which was using a mail drop in Plattsburg, New York. Several Oregon businesses and charities had complained they were misled during telephone sales calls from the “yellow pages,” where the caller either wanted to confirm existing listings or verify some other information about the business. Calls were followed with bills for Internet listing services and aggressive collection calls seeking payment for services never agreed to. The company played back taped telephone conversations that made it sound like the victims actually ordered the service when the opposite was true, according to the Oregon DOJ website.
The Federal Trade Commission posted a warning on its website in 2009 regarding such calls.
“The smooth-talking voice on the other end of the line claims to need some information to “confirm” your existing phone book listing. Fast forward a few weeks and your mailbox is jammed with “invoices” threatening legal action if you don’t pay up. Chances are you’ve been hit by a business directory scam.”
The FTC urges business to educate employees about the scam, set up systems to weed out bogus bills, and report the scams to authorities. Tell staff not to respond to seemingly innocent requests to confirm the address, telephone number, or other information claiming to be for a listing the company has in the yellow pages or other business directory. This is essential, since the calls may be recorded and used to extort money from the business with phony invoices.
“The scammers…fire off a rapid series of questions they may tape-record, sometimes sliding in a confusing reference to the cost. The scam works because fraudsters convince the person who picks up the phone that they’re just “verifying” an arrangement the company already has with the directory,” according to the FTC. These calls are followed by urgent “invoices” for $500 or more.
THE SO-CALLED INVOICE
Erin was among these apparent millions who received an “invoice” from Yellow Pages United. She posted an example of it on her blog. It has the words INVOICE across the top in big letters and demands $296 NOW. Read through the comments after Erin’s blog, and you will find many others who received these bogus bills, some for $396 or more. One commenter, writing in August 2010, said she received a similar scam bill from a different company called US-Yellow from Jacksonville, Florida.
In another twist, the form Erin received had her correct phone number crossed out and replaced with a hand-written wrong number. She thinks this is a trick to cause people to contact Yellow Pages United customer service and request their number be corrected. That call is then used as an acklowlegement that that the company’s services were requested.
FORGERY?
Most people remember signing and sending in the form, but Erin asserts she never signed anything. “Not only does the document say “ORDER SIGNED BY – ERIN PHEIL” when I never signed a thing, but there’s an actual signature on the document. And plain and simple, that is NOT my signature. I don’t and never will sign my name with a capital ‘E’.”
THIS CAN GET EXPENSIVE
Somebody named Lisa posted this comment:
“I am getting a bill from Yellow Page B.V. for $2136. The billing they are sending me has my signature on it, but I am certain, that I did not sign it. It asked for an updated address, but there was no writing at the bottom. Now there is writing, stating I agree to a 2 year contract. Can I get out of this? They are now asking for $534 within 10 days to cancel the order.”
Here is a comment from Cyberjam, Sept, 2010
“hi there. i received an invoice last week from united yellow pages. i don’t remember contacting any yellow pages to advertise online or in print my business. so i called them and talked to a james moore. he seems nice because he acknowledged that there is confusion. he lowered my bill from $480.00 to $240.00 if i pay my bill today. he also said that he would remove me from listing. he also wants me to forward any calls or invoice from other company to them as my “legal department” and they will help me. are yellow pages united and united yellow pages the same? if they are, what can i do? should i contact an attorney? oh and besides united yellow page, super pages also contacted me and said that i owe them almost $1,000.00.”
BE AWARE OF “REFUND CHECKS”
Sometimes these faux Yellow Pages companies send a check that appears to be a small refund for an overpayment. When recipients endorse those checks, they are actually entering into a contract agreeing to be automatically billed for advertising purchases.
Back in 2006, Idaho State Attorney General Lawrence Wasden negotiated a settlement with Yellow Pages, Inc., a Nevada corporation, on behalf of Idahoans who had cashed bogus refund checks. The settlement requires Yellow Pages, Inc., and Electronic Directories Company, LLC, a sister company, to provide a refund to any Idaho consumer who cashed the check and paid for advertising services they did not wish to receive. The solicitations consisted of a check for a small amount, usually less than $4, payable to the consumer or business. The checks included language in fine print above the endorsement signature line stating: ‘Please list my company’s information as shown on this check on the Yellow Pages, Inc. website http://www.YellowPages.com. I am over 18 and authorized to place this advertisement by depositing this check and by doing so I agree to pay the fee for the advertisement which is $179 per year, billed in advance, according to the terms which were enclosed with this check,’ according the Idaho Attorney General’s website.
“Although solicitations such as the free checks provided by Yellow Pages, Inc., are common, they are illegal in Idaho because they are deceptive and misleading,” Attorney General Wasden said. “Anytime someone unexpectedly sends you money in the mail, you should be suspicious. There is usually a catch, and it is usually in the fine print. Businesses don’t give away money just to be nice.”
WHO ARE THESE SCAMMERS?
Apparently there are quite a few of them running various companies. According to the Atlanta Journal Constitution and the Florida Times Union, three people were charged in federal court in Atlanta back in 2010, in an alleged $425 million fraud scheme involving mass solicitations for the renewal of dubious “Yellow Pages” listings. The defendants, Mark Stuart Smith, Christopher Jon Gregory, and Marian Phelan, were associated with a company known as United Directories. Smith and Gregory were charged with conspiracy to commit mail fraud and money laundering. Phelan, who the complaint said appeared to be the bookkeeper, was charged with money laundering. I have not found any follow up articles about the disposition of that case. Read more at Jacksonville.com.
Smith’s brother, Charles Smith, was indicted the previous year in Atlanta on similar charges and was listed by the U.S. Postal Inspection Service as an international fugitive, possibly living in Tanzania, and believed to travel extensively in Europe and Africa. More than 10,000 victims lost more than 10 million dollars to Charles Smith, according to USPIS, which also published a wanted poster of him. According to records, he has been implicated in such scams for at least two decades.
(Source: PatrickPretty.com – Covering Ponzi Schemes And Internet Crime).
A follow-up article in the Florida Times Union says another brother, Michael L. Smith, runs Global Directories Inc., which also does business as US-Yellow and under other names. Complaints filed with Florida Attorney General Bill McCollum resulted in an agreement that forced Global Directories to modify its solicitations to no longer resemble local Yellow Pages directories, and reimburse customers more than $85,000 for their losses.
Back in 2008, the attorney general in New York announced a settlement with another of Michael Smith’s companies, Bright Pages. The state had charged that the company also misled customers into thinking it was the local Yellow Pages directories. The state announced that Bright Pages would pay a $150,000 penalty and up to $3 million in restitution to defrauded customers.
In 2008, Attorney General Wayne Stenehjem of Bismarck, North Dakota, issued a Cease and Desist Order against OYP Group based in Montreal, Canada, aka Official Yellow Pages, and its principals: Grant Jamieson, Claude Berthiaume, Karl Garon, Rebecca Donalds and Marc Lafroamboise, aka Marc Lefebvre. Residents had complained to the attorney general that OYP Group contacted them by phone posing as reps of a local yellow pages provider, then followed up with invoices for between $399.95 to $487.95 for a two-year listing. The businesses asserted they never authorized a listing of their business with OYP Group, but were not able to cancel the unauthorized listings. Many were harassed regarding unpaid “invoices” or threatened with collection and legal action.
Repeated attempts by the Attorney General to contact OYP Group were ignored. His investigation revealed OYP Group and its principals appear to be associated with Thompson Hill Publishing dba “The Official Yellow Pages.” Stenehjem had previously issued a cease and desist order against Karl Garon, Kevin Secours, Brian Norberg, and Thompson Hill Publishing, dba “The Official Yellow Pages,” according to a news release by the North Dakota attorney general’s office, dated Nov. 18, 2008.
The Oregon Department of Justice media release website describes Yellow Pages warnings and lawsuits each year between 2005 and 2008.
In 2005 Attorney General Hardy Myers filed a civil racketeering lawsuit against Yellow Pages, Inc.(YPI), a Nevada corporation operating out of Anaheim, California, for allegedly tricking thousands of Oregon businesses into endorsing negotiable checks that the company claimed were actually contracts for Internet “yellow page” listings. The suit alledged that YPI and its president, John M. Wurth of Anaheim, mailed thousands of negotiable checks in a misleading solicitation to Oregon small businesses, churches and synagogues between November 2003 and December 2004. The complaint alleges that 2,776 Oregon victims cashed the checks then received invoices for an Internet listing. The invoices came from a second business in the racketeering enterprise, Continental Recovery Services, Corp. of Simi Valley, California, doing business as Continental Recovery and Filing Solutions and CRF Solutions. Nationwide, the YPI/CRF/John Wurth enterprise collected millions. In Oregon alone, the enterprise invoiced victims for more than $496,000 and netted more than $131,000. People who did not pay were threatened with collections.
In 2007 Attorney General Hardy Myers went after a online “yellow pages” operation called Ad TelAmerica, Inc., for deceptive solicitation of Oregon small businesses. Oregon Department of Justice (DOJ) investigators found that Ad TelAmerica and its president, Barbara Sommer, lead people to believe they were another Internet-based directory called onlineyellowpages.com, a division of Yellow Pages Online, Inc., a Nevada corporation. They also found that the print and CD editions of the directory were only sent to other similarly-scammed advertisers at best, not widely distributed.
FTC GETS INVOLVED
More recently, in July of 2011, the Federal Trade Commission asked a federal judge to temporarily halt a European based phony Yellow Pages operation that targets churches, doctors’ and dentists’ offices, and local retailers in the United States, Canada, Australia, and possibly other countries.
According to court papers filed by the FTC in United States District Court, Northern District of Illinois, Eastern Division, the defendants operate their scheme from Palma de Mallorca, Spain, using corporations based in England and the Netherlands. They have been faxing forms to people since 2009 that include names such as YellowPage-Illinois.com (depending upon the location of the business or organization) and the familiar “walking fingers” logo.
People that respond to the forms receive a faxed invoice seeking payment of $1,068 for 12 months of directory listings, and they are directed to make payment to Yellow Page B.V. at a New York City address. “The defendants often tell businesses or nonprofits that try to cancel that the cancellation period has expired, and that they intend to enforce the contract. Organizations that refuse to pay receive faxes seeking late fees and threatening to refer the alleged debts to a collection agency and harm their company’s credit rating. In some instances, organizations pay the defendants simply to end the harassment,” according to an FTC press release dated 7/28/11.
The complaint alleges that Jan Marks; Yellow Page Marketing B.V., also doing business as Yellow Page B.V. and Yellow Page (Netherlands) B.V.; Yellow Publishing Ltd.; and Yellow Data Services Ltd., bilked small businesses, churches, and non-profits out of millions by representing that businesses and nonprofits had a preexisting business relationship with them, and falsely represented that they were affiliated with a local yellow pages directory, in violation of the FTC Act.
IT’S OUT OF CONTROL
Despite the actions of the Federal Trade Commission and state attorneys general, the fraud is obviously proliferating. The perpetrators specifically named above are by no means the only ones running Yellow Pages scams. The Better Business Bureau of Boston posted this warning on its website on Sept. 3, 2011.
“BBB is warning of a Yellow Pages Scam that is being run by four local operations. One is located in Vermont – Business Solutions Online, and the other three operations are located in Massachusetts – Open Business Directory Limited, Official Yellow Guide Inc. and Yellow Page Solutions. Businesses throughout the country are receiving fraudulent invoices from these operations for unauthorized online advertising.”
“Business Solutions Online is located in Derby Line, Vermont and has an F Rating with BBB. They are also listed at the same address under the name Business Network Power Online Services. There are 22 complaints filed against this entity, several of which are unresolved.
“Open Business Directory Ltd. is located in Boston, Massachusetts and is also known as Yellowpageusa.com. They have an F Rating with BBB, as well as 52 unanswered complaints. Official Yellow Guide Inc. is also based in Boston, Massachusetts, with a BBB Rating of ‘F’. There are 15 unanswered complaints against this operation. They are known under several other names, including Yellow Business Directory, and American Yellow Directory. Yellow Page Solutions is located in Woburn, Massachusetts. Businesses state that Yellow Page Solutions sent them invoices for online advertising that were never agreed to. When confronting the operation about the unauthorized charges, businesses report that Yellow Page Solutions claim that a verbal contract was agreed to and if the past due amount is not paid, the business will be sent to collections.
“In several cases, when businesses file a complaint with BBB against Business Solutions Online or Yellow Page Solutions, their desired settlement is a zero balance on their account. When BBB contacts these operations regarding the complaint, they state that they have audio taped receipts for the online advertising services. Upon review of the audio, the operation claims there was a ‘misunderstanding’ and agrees to terminate all fees, as well as to remove information about the business from their database.”
WHAT CAN BUSINESS OWNERS DO?
“You are not required to pay for a listing that you did not order,” Attorney General Wasden said in a media release he issued back in 2007, after outing another company using the same tactics. In that case, ten Idaho businesses received bills from for “Internet Yellow Pages” listings they believed they did not order . The company behind the bogus bills was Thompson Hill Publishing of Montreal, Quebec, which represented itself “The Official Yellow Pages,” based Auburn, Maine. Thompson Hill implied that it had a prior business relationship with the consumers and misrepresented itself as the consumers’ local “yellow page directory.” Consumers subsequently received an invoice from Thompson Hill for up to $480. According to consumers, if they did not pay the bill, Thompson Hill turned the debt over to a collection agency.
“If you receive a bill for such a service, you should contact the company and explain that you did not approve a directory listing,” Wasden advises. “If the company cannot demonstrate that you ordered the listing, you should file a complaint with the Consumer Protection Division.”
PLACES TO REPORT THE FRAUD
If you think you’ve been victimized in a fraud scheme that involves the U.S. Mail, submit a Mail Fraud Complaint Form to the U.S. Postal Inspection Service or call the U.S. Postal Service’s Mail Fraud Complaint Center at 1-800-372-8347.
Alert your State Attorney General. You can find contact information at http://www.naag.org, or check the blue pages of the phone book under State Government.
Submit a complaint to the Better Business Bureau.
In addition, you may direct questions about Yellow Pages publishers to: Local Search Association, Connell Corporate , 400 Connell Drive, Suite 1100, Berkeley Heights, NJ 07922; ; 1-800-841-0639.
You also may contact the Consumer Response Center at the Federal Trade Commission. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
Not getting the help you think you deserve from the government? The National Small Business Ombudsman and 10 Regional Fairness Boards collect comments from small businesses about federal compliance and enforcement activities. Each year, the Ombudsman evaluates the conduct of these activities and rates each agency’s responsiveness to small businesses. Small businesses can comment to the Ombudsman without fear of reprisal. To comment, call toll-free 1-888-REGFAIR (1-888-734-3247) or go to http://www.sba.gov/ombudsman.
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