Yellow pages scammers ordered to pay back $10M
The faxes looked legitimate, but they were a scam designed to get small businesses and nonprofits to send money to con artists who said they published local online yellow pages.
Now a federal court is ordering the fraudulent companies to pay up.
A district court judge in the northern district of Illinois told Jan Marks and his companies to pay back more than $10 million to the businesses they defrauded. The Federal Trade Commission, which filed a complaint against Marks and the companies in the summer of 2011, announced the judgment on Tuesday.
According to the FTC complaints, companies operating from Palma de Mallorca, Spain, sent unsolicited faxes to churches, doctors' offices, dentists' offices and small retailers in the U.S., Canada, Australia, and possibly elsewhere. The companies operated under names that included Yellow Page Marketing B.V., Yellow Page B.V., Yellow Page (Netherlands) B.V. Yellow Publishing Ltd. and Yellow Data Services Ltd.
The FTC alleged — and the court agreed — that the companies falsely represented that they had pre-existing business relationships with customers. They also falsely represented that they published, or were affiliated with the publisher of, the local yellow pages directories.
Each fax sent to a U.S. business or nonprofit included a local directory name such as YellowPage-Illinois.com, and a "walking fingers" logo similar to the one commonly associated with yellow pages directories, according to the FTC. Businesses were told to return the form to pay for an $89 per month, two-year registration with the online directory.
The FTC said it received several hundred complaints from consumers who received the faxes and thought they were from their local yellow pages directories, confirming listings the consumers already had. According to the FTC, those who returned the faxed forms were billed by Yellow Page Marketing and told to send more than $1,000 to a Park Avenue address in New York City. The FTC said that consumers who tried to cancel were subjected to "threatening and intimidating collection tactics."
The court ordered the companies to repay the money fraudulently obtained to the FTC, which will distribute it to affected consumers. The court also banned the companies from selling or trying to sell Internet directories.