| TRENTON
– Attorney General Zulima V. Farber
announced today that New Jersey has entered
into a multi-state settlement agreement
with Yellow Pages Inc. which resolves allegations
that the company engaged in, among other
things, misleading practices when soliciting
merchants, service providers and other potential
advertisers to buy listings in its Internet
directory.
According to Farber, the California-based
Yellow Pages was the target of consumer
complaints in New Jersey and throughout
the nation with regard to the company’s
practice of mailing a check for $3.47 to
small business owners and solo practitioners.
On the back of the check, in small print,
appeared a statement indicating that if
the check was cashed, the recipient agreed
to list his or her business in the Yellow
Pages’ Internet directory at a fee
of approximately $177.
Under the settlement agreement, Yellow Pages
is permanently barred from sending out checks
which, when cashed or deposited by the consumer,
purport to obligate the consumer to pay
for Yellow Pages goods or services. The
company must also pay restitution.
During a 14-month period, the state received
a dozen consumer complaints about Yellow
Pages Inc. and/or its collection services
company, Continental Recovery Services.
All of the complaints focused on Yellow
Pages’ misleading check solicitation.
“When
soliciting potential customers, those who
sell products and services have a duty to
provide accurate, thorough and clearly-stated
information regarding terms and conditions,”
said Attorney General Farber. “The
alleged conduct involved here – misleading
business operators into buying advertising
with what appeared to be an offer of ‘free
money’ – is a dereliction of
that duty. In any situation where it appears
consumers are being misled, we will take
decisive action.”
“It is our job to ensure that New
Jersey consumers are made aware of the true
terms and conditions of any transaction
before they agree to participate,”
said Consumer Affairs Director Kimberly
Ricketts. “The allegations that Yellow
Pages knowingly solicited and misled consumers,
and tricked them into paying for services
and listings that they did not request,
are unacceptable and will not be tolerated.”
Owned by John Wurth, Yellow Pages, Inc.
is a Nevada corporation with its principal
business offices located in Anaheim, Ca.
Under terms of the multi-state agreement,
the company is permanently prohibited from:
- Directly
or indirectly sending consumers any
solicitation that is in the form of
a check which, when cashed or deposited
by the consumer, purports to obligate
them to pay for Yellow Pages, Inc. goods
or services.
- Engaging
in any collection effort -- either directly
or by a third-party agency -- against
any prior customer for Yellow Pages’
services arising out of the company’s
check solicitation.
- Attempting
to enforce any kind of automatic renewal
of contracts resulting from the Yellow
Pages check solicitation
The
settlement also provides for consumer restitution
to Yellow Pages customers who, prior to
filing of the agreement, filed a formal
complaint with a federal or state agency,
or the Better Business Bureau. In cases
where Yellow Pages, Inc. has not previously
paid a refund to such consumers, the company
must provide a refund of any sums paid by
the consumer in connection with the $3.47
check solicitation (less the amount of the
check cashed by the consumer), and cancel
the contract.
If Yellow Pages receives a complaint from
any prior paying customer within 60 days
after the settlement agreement is filed
– either from the customer directly
or through a government agency or the Better
Business Bureau – then it must pay
that consumer a refund within 30 days.
In addition to New Jersey, a total of 26
other states participated in the Yellow
Pages settlement agreement.
#
# #
|
