For Immediate Release
Media Contact: Bob Cooper
Date: March 3, 2008
Businesses May Get Refunds from Online Yellow Pages Settlement
(Boise) – Directory Billing, LLC, an online yellow pages directory doing business as USDirectory.com, has agreed to change its business practices and provide partial refunds to certain business customers, Attorney General Lawrence Wasden said today. The agreement is the result of an investigation by Idaho and 25 other states regarding Directory Billing’s use of “live” activation checks.
The states alleged that, since early 2004, Directory Billing 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. The back of the checks contained language, in fine print above the endorsement line, stating that, by depositing the check, the recipient agreed to purchase advertising in Directory Billing’s online yellow pages directory. The fine print also stated that, by depositing the check, the recipient authorized Directory Billing to bill monthly fees through the business’s telephone bill or automatically debit money from the bank account into which the recipient deposited the check.
The states’ investigation revealed that some activation check recipients deposited the activation checks without knowing they were purchasing advertising or that they were authorizing a monthly billing or debit.
“Individuals and businesses should be cautious if they receive unexpected checks in the mail,” Attorney General Wasden said. “Businesses don’t send out money just to be nice. They expect something in return. In this instance, it was an obligation to purchase advertising over a long period of time. The ‘activation check with fine print’ approach has been commonly used to sell yellow pages listings. We have settled several similar cases with other companies.”
Current customers who are being billed through their telephone bill or bank account for an online yellow pages listing and who became a customer by depositing an activation check are eligible for partial refunds. These customers should receive a letter from Directory Billing within the next two weeks. The letter will offer a partial refund if they elect to cancel.
The agreement resolves allegations that Directory Billing engaged in deceptive business practices by using the “live” activation checks to obligate businesses and organizations to pay for a preferred business listing on Directory Billing’s online yellow page directory located at www.USDirectory.com.
Under the settlement, Directory Billing agreed that, in the future, it will not use activation checks to obligate businesses to purchase its products and services.
The company has agreed to pay $400,000 to the states. Idaho’s share of the settlement is $8,161.
In agreeing to the settlement, Directory Billing, LLC, did not admit any wrongdoing.
The settlement is subject to court approval.
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