Montreal-Based Operations Targeted Small Businesses, Churches in U.S.
New Federal Trade Commission actions have stopped three Montreal-based telemarketing operations that allegedly bilked millions of dollars from small businesses, churches, nonprofits and local government agencies by charging them for unwanted listings in online “yellow pages” directories. In addition, a federal court has entered a judgment and order against another Montreal-based directory scam in a case brought by the FTC last year.
“Businesses and other organizations should train their staff to hang up on cold calls about business directory services,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Report them to the FTC. We can pursue these cases even if the scammers hide in another country.”
At the request of the FTC and the Office of the Florida Attorney General, federal judges in Florida temporarily halted and froze the assets of two operations, National Business Advertising and Your Yellow Pages. In another case brought by the FTC in Washington state, a federal judge temporarily halted the unlawful business practices of another operation, OnlineYellowPagesToday.com. In all three cases, the government seeks to permanently stop the illegal practices and make the defendants return victims’ money. In a fourth case brought by the FTC in November 2013, Online Public Yellow Pages, a federal judge entered a $15.6 million judgment against the defendants and banned them from the directory business.
The defendants in these cases allegedly sent deceptive invoices to small businesses throughout the United States for unordered business directory listings. If the recipients disputed the invoices, the defendants used a variety of collection tactics, such as playing audio recordings that purportedly proved that the businesses’ employees authorized the business directory listings. The businesses report, however, that the recordings sounded as if they were doctored or merely reflected that an employee had confirmed or verified the business’s contact information in a previous telephone call without agreeing to new services. Many consumers paid the defendants only to avoid potentially damaging collection actions and to end the harassment.
The defendants are charged with law violations for misrepresenting that they had a preexisting business relationship with consumers, that consumers had agreed to buy directory listings, and that consumers owed them money.
National Business Advertising
According to a complaint filed by the FTC and the State of Florida in the U.S. District Court for the Southern District of Florida, Miami Division, the defendants in this case – Francois Egberongbe, Robert N. Durham, Sr., and 7051620 Canada Inc., also d/b/a National Business Advertising, Nationwide Marketing Bureau Inc., National Biz Ads, and Yellow Business Ads – used a variety of deceptive tactics to represent that consumers owed money for business directory listings and advertising services they never ordered, and in many cases, never received.
These defendants also pretended to be various debt collection companies, such as TransUnion Credit Bureau, Regional Debt Recovery, and RDR Collections Inc. The defendants got some consumers to pay, in amounts ranging from $200 to more than $1,500, by promising to stop contacting them and to close the accounts, but they kept billing them afterward. In addition to the federal charges, the complaint alleges that the defendants violated the Florida Deceptive and Unfair Trade Practices Act.
Your Yellow Pages
According to a complaint filed by the FTC and the State of Florida in the U.S. District Court for the Southern District of Florida, Miami Division, the defendants in this case – Donovan B. Hinds, a/k/a Donavan B. Hinds; Ernest Baxter, a/k/a Ernest Baster and Carl Jenkins; Andrew Beitler; Your Yellow Pages Inc., also d/b/a EBS Collections; Rapid Pages Inc., also d/b/a Rapid Yellow Pages; and City Pages Inc., also d/b/a City Yellow Pages and Online City Yellow Pages – used a variety of deceptive tactics to represent that consumers owed money for business directory listings they never ordered. They often cold-called small businesses or non-profits, and often falsely claimed that the consumers owed them money for the second year of a two-year contract, and that the consumers owed amounts ranging from $400 to more than $1,800.
These defendants also pretended to be a Florida debt collection company, EBS Collections. They got some consumers to pay by promising to stop contacting them, but they kept billing them anyway. In addition to the federal charges, the complaint alleges that the defendants violated the Florida Deceptive and Unfair Trade Practices Act.
According to a complaint filed by the FTC in the U.S. District Court for the Western District of Washington, the defendants – Oni Nathifa Julien; OnlineYellowPagesToday.com Inc.; USYellowPageDirectory.com Inc.; 7703236 Canada Inc., also doing business as OnlineYellowPagesToday.com, Target Marketing, and Oniks Media; and 7095333 Canada Inc., also d/b/a USYellowPageDirectory.com and Oniks Media – typically contacted consumers under the guise of confirming contact information in a directory in which the small business or other organization already appeared. Subsequently, the defendants billed consumers $479.95 or more, using the walking fingers image often associated with local yellow page directories on invoices and other correspondence.
The Commission vote authorizing the staff to file the three complaints was 5-0.
Online Public Yellow Pages
On May 8, 2014, the U.S. District Court for the Northern District of Illinois, Eastern Division, entered a default judgment of more than $15.6 million based on consumers’ losses, and a permanent injunction against the defendants behind a Canadian based directory scam operation, Mohamad Khaled Kaddoura, Derek Cessford and Aaron Kirby, and the 15 companies they ran. The FTC charged in a complaint against the operation filed in November of last year that the defendants claimed to be calling consumers about existing yellow pages listings or cancellation requests, but then billed them $499 or more for unwanted new listings, and often bullied consumers into paying by threatening to sue them or damage their credit ratings. The court subsequently halted the scheme and froze the defendants’ assets, pending litigation.
The court order announced today also prohibits the defendants from misrepresenting material facts about any products and services, selling or otherwise benefitting from customers’ personal information, failing to properly dispose of customer information, and collecting money from customers.
The defendants in the case are Kaddoura, Cessford and Kirby; Modern Technology Inc., also doing business as Online Local Yellow Pages; Strategic Advertisement Ltd., also d/b/a Local Business Yellow Pages; Dynamic Ad Corp., also d/b/a Yellow National Directory and Yellowpages Local Directory; Wisetak Inc., also d/b/a Online Public Yellow Pages and US Public Yellow Pages; Wisetak, Inc., also d/b/a Online Public Yellow Pages and US Public Yellow Pages; Internet Solutions LLC, also d/b/a Public Yellow Pages; Yellow Pages Express Inc., also d/b/a Yellow Pages Express; Yellow Pages Online Inc., also d/b/a Yellow Pages Online; CessTech Inc., also d/b/a Yellow US Pages; SEO Online Inc., also d/b/a Yellow Local Directory; SEO Online LLC; SEOOnline, also d/b/a Public Yellow Pages; SEM Pundits Inc., also d/b/a Yellow Pages Online; CC Recovery Corporation, also d/b/a CC Recovery; and M&A Recovery Inc., also d/b/a MA Recovery.
The FTC would like to thank the Office of the Florida Attorney General, the Royal Canadian Mounted Police and the Centre of Operations Linked to Telemarketing Fraud (Project COLT) for their valuable assistance. Launched in 1998, Project COLT combats telemarketing-related crime and includes members of the Royal Canadian Mounted Police, Sureté du Québec, Service de Police de la Ville de Montréal, Canada Border Services Agency, Competition Bureau of Canada, Canada Post, U.S. Department of Homeland Security (U.S. Immigration and Customs Enforcement and the U.S. Secret Service), the U.S. Postal Inspection Service, the Federal Trade Commission, and the Federal Bureau of Investigation. Since its inception, Project COLT has recovered $26 million for victims of telemarketing fraud.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on , follow us on , and subscribe to press releases for the latest FTC news and resources.