More than 300 complaints have been filed against a New York yellow pages publisher, which allegedly engaged in deceptive tactics.
Annalise Bratt, a part-time clerk, remembers that the phone call that came into her office in south Minneapolis was a short one.
The caller, she said, wanted "a little information to get our system updated, to confirm the address and phone number. ... I don't remember them saying anything about 'We will be sending you a bill.'"
So Bratt was surprised when Yellow Local Directory of Mooers, N.Y., faxed her employers an invoice for $499.99 to publish the information in an online directory.
"I was shocked," Bratt recalled, noting she is not authorized to approve such expenditures.
Maureen Walsh, who operates the small business with her husband, believes Yellow Local Directory is trying to obtain money under false pretenses.
"I spent four hours on the phone with them," Walsh said. "I told them I was filing a report with the Federal Trade Commission, and I was not paying the bill."
Steven Hughes, who heads the complaints department of Yellow Local Directory, insisted his company is a legitimate advertising firm that properly discloses its fees and services.
"We don't trick any clients," Hughes said.
So far, more than 300 complaints have been filed against Yellow Local Directory with Better Business Bureau chapters in upstate New York and northern Nevada. Both BBB bureaus gives the firm an "F" rating.
Yellow Local Directory also is under investigation in Canada by the Competition Bureau, Canada's version of the Federal Trade Commission.
"We know it's a scam," said Staff Sgt. Jacques Rainville of the Royal Canadian Mounted Police, which investigates international scams related to telemarketing.
Walsh and her husband operate the Vineland Group, a Minneapolis business offering interior design and tree-trimming services. It had never advertised with Yellow Local Directory before.
Walsh said she called the firm to challenge the charge. 'They said, 'No, someone authorized it.'"
After Walsh continued to object, a company representative pressed her to listen to a tape recording of the phone call, a standard tactic, according to federal officials.
"I heard them ask questions, verifying the address, the name, and the phone, the fax number and her name," Walsh said. "At the end they ask, 'Are you aware there will be charges for listing,' and Annalise said "Yes." Bratt maintains she was never asked that question. Walsh believes the company doctored the tape.
Tim Johnston, president and CEO of the Better Business Bureau in northern Nevada, said there have been other allegations against yellow page firms over doctored recordings. He advised caution. "They ply their trade well," he said.
Hughes blamed the company's "F" rating with the BBB on Yellow Local Directory employees who failed to handle complaints about the firm's services. He said those employees were terminated.
"There are a certain number of customers who are going to be unsatisfied, whether it is a cell phone company or a cable service," Hughes said. "We have our complaints as well."
If a customer is "adamant" about being "misled," Hughes said, "we will cancel their account and void out the balance."
In Walsh's case, Yellow Local Directory sent her a new bill including collection charges and interest after she disputed the original charge. Her new total: $683.33.
After Whistleblower called, Hughes said he would personally discuss the dispute with Walsh, "see what was said and come to a resolution."
Though Yellow Local Directory has an address near the Canadian border in upstate New York, it is actually operated out of Montreal, Canada, according to the Nevada attorney general's office.
Hughes said the company's headquarters are in Mooers, N.Y., and that some people confuse the firm with other yellow page publishers in Canada.
Steve Baker, Midwest director for the Federal Trade Commission, said there are a number of Montreal companies using deceptive marketing tactics to drum up yellow page advertising in the U.S. He said those firms make it sound like they are simply calling to confirm information, then turn around and send a bill for putting information on a website that few people ever consult.
"We urge people not to pay," Baker said. "These people are not legitimate businesses and do not have any reporting relationship with the three major credit bureaus."
Baker said the FTC successfully prosecuted a Canadian telemarketer for running a fraudulent scheme of business directories in 2006. Terrence Croteau was convicted on federal charges and sentenced to more than 12 years in prison.
In 2006, Minnesota Attorney General Mike Hatch obtained a permanent injunction against another company, Yellow Pages Inc. of Nevada, for allegedly violating the state consumer fraud act by tricking companies into buying online advertising.
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