The FTC brings down the hammer on scammers who let their fingers do the walking -- straight into their victims' wallets.
The Better Business Bureau (BBB) reported last week that the Federal Trade Commission (FTC) took action against a scheme that the BBB warned businesses about last year.
At the request of the FTC, a federal judge has temporarily halted a European-based operation that allegedly bilked small businesses and nonprofit organizations out of millions of dollars by deceiving them into ordering and then paying for unwanted listings in online business directories. The FTC is seeking to stop the illegal practices permanently and to require that the defendants reimburse their victims.
The Canadian Competition Bureau also filed a lawsuit against the operation, as the alleged crooks also target small businesses and other organizations in Canada.
According to the court papers filed by the FTC, the defendants operated their scheme from Spain, using corporations based in England and the Netherlands. The FTC says that since 2009, the defendants have sent unsolicited faxes to local retailers, churches, and medical offices in the United States, Canada, Australia, and possibly other countries.
Each fax sent to a U.S. victim included a name such as YellowPage-Illinois.com and a "walking fingers" logo similar to the one used by local yellow pages.
The FTC alleges that the faxed forms falsely suggested that the victims have a pre-existing relationship with the defendants. The forms contained information about the businesses and organizations, and a Yellow Page ID number. The faxed forms instructed the recipient to confirm and update the information, and sign and fax the form back by a certain deadline.
Buried in fine print at the bottom of the form was a notice stating that, by returning the form, victims would be ordering an $89 per month, two-year registration in the defendants' online directory, payable a full year in advance. The FTC says that many victims of this scam did not read or even see the fine print; they signed and returned the form in the belief that they were merely updating their local yellow pages listing.
The FTC states that victims who returned the form received a faxed invoice seeking payment of $1, 068 for 12 months of directory listings. Victims that refused to pay would receive additional faxes seeking late fees and threatening to refer the alleged debts to a collection agency -- thus harming the victim's credit rating.
In some instances, the FTC says, victims paid the defendants simply to end the harassment.
"The FTC is committed to working with its law enforcement colleagues in Canada and around the world to stamp out international schemes that target U.S. consumers," said David C. Vladeck, director of the FTC's Bureau of Consumer Protection. "We applaud our friends in Canada for helping to coordinate this international effort."
"The Bureau is pleased that the FTC has joined us in targeting the individuals involved in this cross-border scam," said Melanie Aitken, Canada's the Commissioner of Competition. "International collaboration is key to cracking down on multi-jurisdictional scams."
The BBB recommends that if you suspect you have received a call, fax or mailing from a bogus Yellow Pages entity, contact the Federal Trade Commission at 1-877-FTC-Help, or the Yellow Pages Association at 1-800-841-0639.