Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Alleged 'Yellow Pages' scammer must pay $400K, (Nov 30, 2015)

By Greg Hammond, J.D.

The FTC has obtained a modified final judgment against a company for sending unsolicited direct mail to advertise or promote goods or services after settling claims that the company tricked small businesses into paying for unordered online business directory listings. The company is consequently responsible for a judgment of nearly $400,000 (FTC v. Your Yellow Book Inc., File No. 142 3070, Dkt. CIV-14-786-D).

The FTC filed a complaint in the U.S. District Court for the Western District of Oklahoma in July 2014, charging Your Yellow Book with defrauding small businesses, doctors’ offices, retirement homes, and religious schools. The defendants purportedly asked consumers to verify or update information in Your Yellow Book’s Internet business directory and to pay up to $487. Many consumers allegedly paid, believing their organization had agreed to be listed in the directory.

Under a stipulated order for permanent injunction and monetary judgment, the defendants agreed to a $715,000 judgment that was partially suspended. The defendants were also prohibited from misrepresenting that consumers have preexisting business relationships with any defendant or other person; that consumers have agreed to purchase a good or service; that consumers owe money for a good or service; the nature of any defendant’s or other person’s relationship with consumers; the purpose of any communication with consumers; or any material fact to consumers concerning any good or service.

The FTC subsequently claimed that multiple defendants are in contempt of the final order by sending deceptive direct mail to advertise, market, or sell goods or services and by benefiting from consumer information obtained in connection with Your Yellow Book. The district court entered a modified final order imposing a nearly $400,000 monetary judgment against CPU Service Inc. and an individual defendant. The defendants are further prohibited from using any unsolicited direct mail or from attempting to collect or collecting payment for any goods or services advertised or billed through CPU Service Inc.

Companies: Your Yellow Book Inc.; CPU Service Inc.

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