BBB Logo

Better Business Bureau ®
Start With Trust®
Eastern Massachusetts, Maine, Rhode Island and Vermont
Find us on Google+

Educational Consumer Tips

Business Directory Scam

Author: Rachel Willard
Published:
Category: Scams

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 Federal Trade Commission (FTC) and the Better Business Bureau (BBB) have seen an increase in this form of fraud. Small and medium-sized businesses, churches, and not-for-profit groups have been hardest hit. Many will pay the bogus invoices in the mistaken belief that it’s simply a misunderstanding. But it’s not. It’s a growing form of fraud run by international scam artists. The FTC and the BBB are asking businesses to: 1) educate employees about the scam; 2) set up systems to weed out bogus bills, 3) use free BBB resources to check out questionable companies; and 4) report the scams so that law enforcers can stay ahead of the curve.

How the Scam Works

The Call. First, con artists make cold calls to offices. They ask the person answering the phone to “confirm” the address, telephone number, and other information, claiming it’s for a listing the company has in the yellow pages or a similar business directory. The scammers then 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.

The Bill. The con artist then sends urgent “invoices” for $500 or more — sometimes including a copy of the “directory.” They’re usually worthless and are never distributed or promoted as promised. Often, they’re just websites with listings of various businesses. In many cases, the person paying the bills will simply cut a check, not realizing that the company never agreed to pay the hefty fee for the directory. But if businesses resist, the scammers turn up the heat, threatening collection or legal action to get payment. They may use the name of the person who answered the phone or play a “verification tape” as “proof” that the company owes them money. Often these tapes have been doctored or the nature of the transaction was rattled off in a way no one could have understood. If companies stand firm in their refusal to pay for services they didn’t authorize, the scammer may try to smooth things over by offering a phony discount. Or they may let the company return the directory — at the company’s own cost, of course — but insist on payment for the so-called listing. At this stage, many companies pay up just to stop the hounding. What they don’t know is that they’ll likely get more bogus invoices — either from the same scam artist or from others who have bought their contact information for a new scheme.

How can I protect my business?
Take the following four steps to protect your company from business directory fraud.

Train your staff to spot this scam.
Educate your employees about how this scam works. In addition to your regular receptionist, talk to everyone who may pick up the phone. Put a copy of this alert in employee mailboxes. Mention it in a staff meeting. Post it on the break room bulletin board or where employees clock in and out.

Inspect your invoices.
Depending on the size and nature of your business, consider implementing a purchase order system to make sure you’re paying only legitimate expenses. At a minimum, designate a small group of employees with authority to approve purchases and pay the bills. Train your team to send all inquiries to them. Compile a list of the companies you typically use for directory services, office supplies, and other recurring expenses. Encourage the people who pay the bills to develop a “show me” attitude when it comes to unexpected invoices from companies they’re not familiar with. Don’t pay for products or services you’re not sure you ordered.

Verify to clarify.
Many business directory scam artists are headquartered in Canada, but use post office boxes or mail drops to make it look like they are in the United States. Before paying, check them out for free at bbb.org, and read the BBB’s report on them.

File a complaint.
If a scammer is sending you bogus bills, speak up. Visit bbb.org to complain to the BBB. And let the FTC know by filing a complaint at ftc.gov or calling 877-FTC-HELP (1-877-382-4357). Your complaints help shape the FTC’s law enforcement agenda, so it’s important to sound off when you spot a scam. Concerned about business directory fraudsters’ threats to tarnish your credit if you don’t pay? Many will simply drop the matter — and may even provide a refund — if they know you’ve complained to the BBB and law enforcement.

About the Author: Rachel Willard is Communications and Marketing Manager for BBB serving Eastern Massachusetts, Maine, Rhode Island and Vermont. Find Rachel on Google +.

Questions and Comments

Question Submitted 1/22/2013

If I have not paid this bill to the Yellow pages scam what should I do, can I get a bad debit due to this false invoice?

BBB's Answer:

BBB has no records of the business in the country, nor have we heard of any businesses receiving calls from debt collectors regarding Open Business Directory. File a complaint with BBB and then also Let the FTC know by filing a complaint at ftc.gov or calling 877-FTC-HELP (1-877-382-4357). Your complaints help shape the FTC’s law enforcement agenda, so it’s important to sound off when you spot a scam. Concerned about business directory fraudsters’ threats to tarnish your credit if you don’t pay? Many will simply drop the matter — and may even provide a refund — if they know you’ve complained to the BBB and law enforcement.

Comment Submitted 5/16/2013

Hi, we unfortunately signed the agreement and they have been chasing us for payment with threats for about 9 months. We've asked you about them and your comments have been to simply ignore them. They are using the "threat" of ruining our credit. They want a smaller sum to close this out, we want to know if anyone has actually been sent to collections, etc... Our understanding is they have not from notes above. Thanks, Curt ps-our attorney general suggested we seek a lawyer and they say since our attorney general said this, we must still pay

Comment Submitted 10/1/2013

HI, We are in a similar situation where an employee actually did sign the contract believing they were just verifying our address for the real Yellow Pages. They have been trying to collect for about 10 months now and have sent a "final" offer to settle for a lesser amount ($594.00). They threaten to send it to collection if we do not send payment in within 7 days. Has anyone been sent to collection yet?

Comment Submitted 4/9/2014

It has resurfaced. I am getting phone calls and faxes demanding payment. I thought I was renewing my YP listing. I have received 5faxes and just today a threatening phone call demanding a payment.I work for a small business in central California (not mine) and I am getting scared these people will knock on the front door. Will me credit be affected?

Comment Submitted 5/16/2014

Getting invoices via fax again. I want to make this stop. Seems as soon as you send a stop this notification they send more! Threatening to send to collections & file claim with the IRS now!

Comment Submitted 6/21/2014

This company has been sending fax and phone calls. I signature on the paper is not mine. I am a small business and did not order this company. But they are harassing my business and my credit. I want them to stop.

Comment Submitted 7/31/2014

The owner of the company I work for is not very tech savvy. He signed the contract and always pays his bills. Unfortunately he paid this bill Aug. 23, 2013. I was looking through old bills and found this bill after stopping many other scams of this nature. Is there a way to get a refund from this company? If so, what do I need to do?

Comment Submitted 11/20/2014

I have received a bill from **** ******** ********* *** for $1213. We have not used this company. I am unsure of how to file a complaint as the mailing address is not in the USA, it is in Switzerland. I would like help with this complaint.
Disclaimer:
Views expressed on this page are those of the individual author and do not necessarily reflect the views of Better Business Bureau.

Rate this tip

Rate this tip by choosing the stars below.
Average Rating:

Submit a Comment or Question on this tip





  1. (This is the name that will be displayed to the public)