FTC Goes After Online Directory Scammers

By Jerri Stroud, BBB Editor

phonebooksforWebDirectory scams prey on busy small business owners and others who don’t want to stop and research every piece of paper that crosses their desk or every caller who offers to feature the business in a listing, online or in print.

Better Business Bureau has fielded complaints about scammers that send companies bogus bills for directory listings that resemble those sent by legitimate Yellow Pages publishers. Other scammers offer to list a company in online directories without revealing the cost of the listing.

The scheme that the Federal Trade Commission took action against recently was the latter kind. After the FTC brought an action against the scammers – based in Slovakia – a federal court banned the company from the online directory business and levied a $9 million fine against them.

In a press release, Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, said,  “The last thing small business owners need is someone trying to trick them out of their hard-earned money. The FTC is committed to taking action against this kind of deceptive scheme.”

In the recent case, the agency said scammers doing business as Construct Data Publishers or Fair Guide tricked small businesses and nonprofits into paying millions of dollars to be listed in an online directory they didn’t ask to be listed in and for which they didn’t realize they’d be charged.

According to an FTC press release, the scammers sent mailings to small retailers, home-based businesses, location associations and other companies who attended trade shows. The letters implied that Fair Guide had an existing business relationship with the small companies and suggested that the recipients needed to confirm or update their information for an upcoming trade show. Fine print on the forms said that by signing and returning them, the business was agreeing to pay $1,717 a year to Construct Data Publishers for a listing on the company’s website, fairguide.com.

Construct Data hired a company in Naperville, Ill., to disguise its location in Slovakia, the FTC said. Prepaid return envelopes were directed to a post office box in Chicago and were forwarded from there to Slovakia.

BBB advises companies to carefully scrutinize any suspicious offer for a directory listing or any invoices for directories. More tips:

  • Be skeptical of calls, faxes or mailings from unfamiliar companies.
  • Be especially careful when asked to give supplemental information about your business over the telephone or via mailed, emailed or faxed forms. Supplying such information could be seen as an agreement to pay for advertising or an online listing contract.
  • Channel all invoices through one department and make sure they are cleared with  appropriate managers before they are paid.
  • If you feel you are being asked to pay something you do not owe, contact your state attorney general, the U.S. Postal Inspection Service, the Federal Trade Commission or BBB.
  • Check out a company’s BBB Business Review at www.bbb.org or at 314-645-3300.

For more BBB news, go to BBB’s website or follow BBB on Facebook or Twitter.

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