Let Your Fingers do the Walking and Dial FTC: The Business Directory Scam

Posted by Pamela S. on Thursday, April 12th, 2012

Your company receptionist answers the phone and confirms your address, telephone number and other information to a representative of the Yellow Pages, or another professional directory.  This phone call is going to cost your business money for nothing. You have been scammed.

The “Business Directory” scam has been played for a while now. The Federal Trade Commission has been working in conjunction with The Competition Bureau of Canada, The National Fraud Intelligence Bureau of the UK, The Australian Competition and Consumer Commission, the International Consumer Protection and Enforcement Network and over 40 consumer protection organizations in other countries to bust a scam of international proportions.

Scammers representing as the “Yellow Pages” misled businesses in the United States, Canada and Australia. The companies involved in the fraud were: Yellow Page Marketing B.V., the principal company, Backoffice Support SL,  which was the administrative support located in Spain, Yellow Business Marketing Ltd., a Toronto-based agent, and UK companies Yellow Publishing Ltd. and Yellow Data Services Ltd. The principals involved were Brandon Marsh, a manager of Yellow Business Marketing Ltd. and Jan Marks and Steve Green, both residents of Spain.

These companies scammed millions of dollars from the coffers of small and mid sized businesses in the U.S. Some of the targets were non-profits. They were deceived into paying for listings in business directories that didn't exist.

Telemarketers posing as representatives of the Yellow Pages would verify company information and then use this information to claim that the organization had agreed to purchase listings that cost hundreds of dollars. They sent out invoices that appeared to be legitimate, right down to the “Let your fingers do the walking” logo.  Many companies paid the invoice. If they didn't pay, they were subjected to threatening telephone calls and mail. The scammers used U.S. mailing addresses.

persuasive essay topicscanadians-and-americans”>The U.S. and Canada share more than a border. Our countries have deep ties and often come together to fight crime that affects residents of both nations.
“The FTC is committed to working with its law enforcement colleagues in Canada and around the world to stamp out international schemes that target U.S. consumers,” said David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection. “We applaud our friends in Canada for helping to coordinate this international effort.”

“The Bureau is pleased that the FTC has joined us in targeting the individuals and companies involved in this cross-border scam,” said Melanie Aitken, Commissioner of Competition. “International collaboration is key to cracking down on multi-jurisdictional scams.”

This March, our neighbors in the great white north brought the hammer down. The Canadian courts ordered restitution for the victims of the scam and imposed an $8 million dollar administrative monetary penalty (AMP) on the companies, and further penalties on the principals.

The FTC provides the following tips to protect your organization 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).

Former FBI Assistant Director Tom Sheer has recruited the best from the FBI, DEA, IRS and Secret Service to build a formidable team at Sheer Investigations. Our private investigators have the sensitivity and experience to handle the most delicate investigations.

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