On-Line Yellow Page Listing Service To Pay $400,000 To Resolve Allegations It Scammed Customers

Massachusetts to Receive over $16,000 in Settlement Monies

March 03, 2008 -- BOSTON - Today, Massachusetts Attorney General ­­­­­­­­­­­­­­­­­­Martha Coakley’s Office reached a settlement with Florida based Directory Billing, LLC, (doing business as USDirectory.com) resolving allegations that the company engaged in deceptive business practices by using “live” activation checks to require businesses and organizations to pay for a preferred business listing on Directory Billing’s on-line yellow page directory, located at www.USDirectory.com. The agreement is the result of an investigation by Massachusetts and 25 other states Attorneys General regarding Directory Billing’s use of activation checks.

“It is not only consumers, but businesses that have to be aware of scams,” said Attorney General Coakley. “If businesses and consumers receive a check that they did not expect to receive, they should be careful to read the fine print to make sure they are not mistakenly enrolling in a service they do not want. Often, the checks are for small amounts. Businesses and consumers should be on the lookout for unauthorized charges on their telephone bills and bank accounts, which these scams rely on going unnoticed.”

The States’ alleged that since early 2004, Directory Billing, LLC, sent businesses and other organizations “live” activation checks in the mail. These checks were made payable to the business or organization for a small amount, usually $3.50. On the back of the checks, in fine print above the endorsement line, was language stating that by depositing the check, the recipient agreed to purchase advertising from Directory Billing, LLC, in its on-line yellow pages directory. The fine print also stated that by depositing the check, the recipient authorized Directory Billing, LLC, to bill monthly fees through the business’s telephone bill or through automatic debiting of the amount from the bank account into which the recipient deposited the check, or by other methods.

The States’ investigation revealed that some check recipients had deposited these activation checks without knowing that they were purchasing Directory Billing’s on-line advertising services. Further, some recipients were unaware that they were authorizing monthly billing through their telephone bill or through debits from their bank account. In some of these cases, the recipient remained unaware that they were being billed for several months, or longer, following that deposit.

According to the terms of the settlement agreement, filed today in Suffolk Superior Court, Directory Billing has agreed to not use activation checks as the means of requiring businesses to purchase its products and services. The company also has agreed to pay $400,000 to the states to be used for restitution to former customers that did not understand the consequences of depositing the activation check and to reimburse the states for their investigation costs. Under the terms of the agreement, the company must also contact its customers that used activation checks to inform them of their right to cancel their agreement and of their potential eligibility for a partial refund of monies paid to Directory Billing, LLC.

Customers which are currently being billed through their telephone bill or bank account for a listing and which became a customer by depositing an activation check should be contacted by letter within the next two weeks by Directory Billing. The letter will advise them that they may have unknowingly enrolled in Directory Billing’s service and offer a partial refund if they elect to cancel.

Directory Billing customers with questions may call the Attorney General’s Office Consumer Hotline at (617) 727-8400.

Joining Massachusetts in today’s settlement are: Alaska, Arizona, Arkansas, California, Connecticut, Delaware, Florida, Idaho, Illinois, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, and West Virginia.

This matter was handled by Assistant Attorney General Jonathan Engel of Attorney General Coakley’s Consumer Protection Division.

Source: Massachusetts Attorney General ­­­­­­­­­­­­­­­­­­

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