Consumer Alert
Small Businesses Beware: You May be the Target of a 'Yellow Pages' or Online Directory Scam
Scammers use deceptive sales tactics and threats of collections actions to bilk money from small businesses and charities for fake “yellow pages” and other directory advertising. The Consumer Protection Unit has noticed an increase in the number of complaints about this scam and cautions small businesses and nonprofits to train employees to recognize these bogus solicitations.
The Typical Directory Scam
Directory scammers usually contact small businesses, churches, or charitable organizations through an initial fax or phone call to “confirm” information such as an address and phone number. For online directories, they may also ask questions about the entity, supposedly to use for search terms to submit to search engines. Employees often confirm or provide requested information thinking they are simply updating an existing advertisement or listing.
The scammers subsequently send a bill or invoice, claiming that an employee authorized the purchase. The bill may be for thousands of dollars -- purportedly advance payment for a year or more of service. Collection efforts are aggressive. If businesses protest, they are threatened with late fees, collections, and legal action. Many small business or organizations decide to give in and pay, thinking they have to protect their credit or just hoping to stop the harassing phone calls or faxes.
Tips for Protecting Your Organization
- Talk to your employees and coworkers about this scam.
- Train employees to only pay invoices from verifiable transactions with trusted businesses.
- Look closely at invoices and read the fine print.
- Consider implementing a purchase order system if you don’t have one, to make sure you’re paying only legitimate bills.
- Read up on this and other scams targeting small businesses:
Consumer Protection Unit
August 2011