The Federal Trade Commission announced Thursday that it has moved to put a halt to three Montreal-based operations that it claims fleeced unsuspecting small businesses, nonprofits, municipal agencies and churches out of millions of dollars by billing them for spots in online directories without their consent.
Federal judges in Florida and Washington state temporarily have blocked the three companies from operating, the FTC said, while a federal judge in a fourth case brought by the agency last fall approved a $15.6 million judgment and barred the firm from engaging in the directory business for life.
The FTC wants the courts to permanently shut down the three online directory companies and order them to return the money they stole to their victims – in some cases as much as $1,800.
“Businesses and other organizations should train their staff to hang up on cold calls about business directory services,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, in a statement. “Report them to the FTC. We can pursue these cases even if the scammers hide in another country.”
How does this scam work?
Here is how I described it when I first wrote about it in a “Scam of the Week” column (“Yellow Pages phone scam targeting business owners“) on Oct. 20:
You get a call at work from someone claiming to represent an online version of the Yellow Pages. The caller says he is updating your listing in the directory and proceeds to ask a series of seemingly innocent questions, such as your company’s mailing address, telephone number and email address. Afterward, he reads it back and asks you to confirm that each item is correct.
Everything seems fine until a few weeks later, when your office receives a bill for hundreds of dollars for placing an advertisement in the online Yellow Pages directory – even though you agreed to no such thing …
When you protest, the representative plays back a doctored recording of the earlier call, which makes it appear you were saying “yes” to place the ad, not to confirm information.
Now, whether any of these companies targeted by the FTC are responsible for defrauding Albuquerque businesses directly is hard to say.
Connie Quillen, executive assistant at the Albuquerque-based Better Business Bureau Serving New Mexico and Southwest Colorado, told the Journal that it’s difficult to know whether these operations are connected to New Mexico.
But she did say a search of the BBB’s internal national database found that two of the complaints against one of the individuals named in the FTC complaints were filed by New Mexico residents.
Does the BBB still get complaints from local businesses about this scheme?
“Yes, we do,” she said. “Complaints like this have ‘peaks and valleys’ but never completely go away. I would still classify this one as a regular call that our office gets.”
For more details, click here to read the FTC news release.