It doesn’t take a lot to fool a hurried small business owner. Case in point: The Federal Trade Commission just announced a series of legal actions against three Montreal operations accused of talking U.S. small business owners into paying millions of dollars for local yellow page listings the merchants neither bought nor received.
A common version of the scam went like this: The crooks called small businesses (some nonprofits, churches, and local government agencies also fell victim) and asked to confirm the shop’s name, address, and telephone number. Then the fraudsters call again to tell the business that they owed amounts as high as $1,800. When the business owners protested, the crooks played back recordings of the earlier phone calls, doctoring recordings to make it sound like the merchant had agreed to pay.
It sounds crude, but plenty of business owners coughed up the cash. One group of scammers tricked thousands of victims out of at least $4.9 million, according to a complaint filed by the FTC in U.S. District Court in Florida.
Directory listing scams aren’t new. In 2012, an Illinois court ordered a group of companies operating out of Palma de Mallorca, Spain, to repay $10 million to small businesses shaken down for payments for listings the merchants never agreed to buy. In that version of the scheme, crooks sent faxes bearing the “walking fingers” logo associated with local yellow pages. Merchants who returned the faxes were billed for $1,000 and threatened with aggressive collection tactics.
By trading fax machines for tape recorders and audio editing, the scammers may have climbed up a rung on the ladder of low-tech schemers who prey on Main Street. They’re not as sophisticated as the tin-foil bandits who clamber on the rooftops of convenience stores with rolls of aluminum wrap in an elaborate ploy to buy cigarettes with stolen credit cards. But they’re way ahead of the crude criminals who simply call small business owners and ask for cash.