Yellow Page Advertising Trickery

August 01, 2013

It starts with an unsolicited phone call to “confirm” or “verify” the existing business information that the purported Yellow Pages has on file for a given business. The caller’s company may have the word “local” or “online” or some other descriptive moniker as part of their “yellow page” name. As the caller goes through a variety of rapid fire questions, like affirming your business address or other contact information you say “yes.” As the phone call ends, the conversation you have just participated in begins to turn the wheels of a well oiled scheme. Be prepared at this point for a collision. In a month or two the invoices, harassing calls and threats will start.

While this scheme is certainly not new, it persists. Last year the Federal Trade Commission shut down and obtained a default judgment for $10.2 million against a company using the Yellow Page name. The scam used a New York address, had its operations in Spain and used foreign corporations to play its game. It is not the first time a U.S. Federal or State Agency has taken action against such rip-offs and it will not be the last. Unfortunately, yellow page trickery is a game of whack-the-mole: they keep popping up. One east coast yellow page company has generated in excess of 700 plus complaints with the Better Business Bureau (BBB) in five months. They also have an “F” rating with the BBB.

Part of the problem is that the Yellow Page name and the familiar walking-fingers logo are not protected by copyright or trademark provisions. While you may think you are dealing with your local telephone directory publication, anyone can use the name and logo. In many cases the directory, publication or internet listing in which they claim to publish the advertisement is non-existent. In other cases the listing may be real; however, the distribution is limited in scope, quantity or the online traffic to their web site is low. In short, the listing is most often useless.

So what do you do when the unauthorized invoice shows up? Use it for kindling or wrapping fish, but do not pay the invoice. If you mistakenly pay it, you are likely saying goodbye to your money. If you fail to pay it, you will get more invoices and you very well may start to receive collection calls. BBB complaint files show that these calls are not pleasant. The collection calls can turn personal, heated and complete with threats of legal action. The collector will often play back a verification taping of the “yes” they recorded you or someone else saying. This is their proof that you owe them money.

The BBB Code of Advertising states, “Misrepresentations may result not only from direct statements but also by omitting or obscuring material facts.” If the invoice you receive clearly states in a readable font size “THIS IS NOT A BILL. THIS IS A SOLICITATION. YOU ARE UNDER NO OBLIGATION TO PAY…” then you can assume the telephone conversation concerned a solicitation and not a collection. If such disclosures are not part of the invoice, the yellow page invoice may be a swindle and in violation of U.S. Postal Service requirements. If you feel the “yes” you were providing was obtained upon false pretense, you have every right not to pay.

As with any type of marketplace interaction, the FTC and the BBB recommend that businesses put into place certain preventive measures to ensure the invoices you pay are legitimate. Step one: educate employees about such bogus invoicing, especially the front desk or receptionist who initially fields such calls. Step two: set up systems to weed out solicitations designed as invoices. Step three: use the BBB to check out questionable companies. Step four: report potentially fraudulent instances so that law enforcement can stay ahead of the curve.

If you receive an invoice that appears questionable, the BBB recommends the following:

  • Established a tight span of control. Only certain managers should have official decision making authority.
  • Inspect every invoice closely before paying it. Ensure there is an established relationship with the vendor and a way to authenticate them.
  • Channel all invoices through a centralized department and make sure they are cleared by the authorizing authority before paying.