The Yellow Page Business Directory Invoice Scam Continues to Claim Victims in North Carolina

This tricky scheme most frequently targets small businesses, nonprofits, churches, credit unions, and local government agencies

The Yellow Page Business Directory Invoice Scam Continues to Claim Victims in North Carolina
Image: NCCC
March 6, 2019

Businesses of all sizes should be on alert for fake invoices for supposed listings in the Yellow Pages or other business directories, which are once again increasing in frequency. While it can be very easy to fall for this particular scam, it can also be easy to spot if you know what to do. Knowing what this scam is all about before you fall victim and lose your hard-earned money is your the first step.

Why does a directory scam work so well?

The Yellow Pages or business directory scam is pretty simple and similar to many other scams that are out there. While a business of any size is at risk of falling victim to this scheme, it most frequently targets small businesses, nonprofits, churches, credit unions, and local government agencies. It's easy for scammers to con these types of organizations because of number of people potentially at these companies. A dedicated employee wanting to help the company is typically happy to talk to a caller who simply wants to 'verify' or 'confirm' a company's contact information for a listing in a business directory. And that's where the scammers get their feet in the door.

it almost always starts with a phone call

The con usually begins with a phone call, though mail, email, and fax are also used as a point of first contact if the scammer is unable to reach a live person. When the scammer calls, it's a pretty simple ploy. The caller simply wants to 'verify' or 'confirm' a company's contact information for a listing in a business directory, which is usually the Yellow Pages due to its popularity and name recognition. As the scammer is working, the employee is giving valuable information that the scammer can then use to generate invoices. In some cases, employees may provide financial information over the phone in order to pay for an existing listing, a new listing, or a listing upgrade. In reality, the employee is handing the scammer free money.

Businesses with legitimate listings are prime targets

While we can't be sure of how the scammer gets your information, it's likely the scammer is targetting businesses that have legitimate listings in business directories, such as the Yellow Pages. But the employee has no way of knowing that the person calling is not associated with the listing. In fact, the scammer might be trying to verify information for a directory that doesn't even exist but sounds real.

Avoid saying "yes" to someone on the phone

Of course, an employee answering the phone doesn't know who is on the other end and presume the caller is legitimate. When a scammer is working over the employee with promises of listing enhancements, listing upgrades, listing renewals, etc., often advertised as completely free, the scammer is really trying to get the employee to say "yes" on a recorded line, as well as to find out to whose attention future scam invoices should be mailed to. If the scammer then invoices the company and the company tries to fight it, the scammers provide a doctored version of the phone call in which the employee is saying "yes" to whatever the scammer wants as 'proof' of an agreement. The unsuspecting business owner or management then feel compelled to pay the invoice.

Here Come the fake Invoices

Once a scammer 'confirms' the business information, the business starts receiving urgent invoices for various sums of money that usually amount to hundreds of dollars. The very convincing invoices might even include the "walking fingers" logo and the Yellow Pages name. In many cases, the person paying the bills will simply cut a check, not realizing that the company never agreed to pay the hefty fee for the directory, a directory which may or may not even exist.

If the first contact made by the scammer is via mail, email, or fax, fine print on the correspondence may say that by returning the mailer or responding in any way the company is agreeing to an expensive business directory listing. Always read the fine print on any solicitation, not just the potential scams!

Collection Calls, Late Fees and penalties

If a business disregards the invoice and sends no money, the scammers will start making collection calls and sending collection notices that threaten late fees and other penalties. Some of these scammers will even go as far as to threaten to ruin the credit of the company or its owners and employees, to take them to court, or to refer the debt to a debt collector. If the company stands firm in a refusal to pay, the scammers try to smooth things over by offering a 'discount' to settle the matter and stop the calls and invoices. Unfortunately, many companies pay at this point in order to stop the incessant phone calls and mailings.

Responding to one opens the door to others

Responding to one of these scammers is just like responding to other scammers. If a scammer knows that you answer the phone or reply to mailings, it's a sign that they've found an easy target. The more you interact, the more valuable you become. Scammers are just like legitimate marketing firms in that they sell their contact lists. This means that your interaction with one scammer will almost certainly translate into more calls and mailings from other scammers over the coming weeks, months and even years.

Avoiding Business Directory Scams

So what can you do to protect your business or organization from this kind of fraud?

  1. Train your staff to recognize scams, especially directory scams.
  2. Educate your employees about how these types of scams work. In fact, send them a link to this article and make them read it! This is probably the most important step as an alert employee can stop the headache before it happens. Once an employee interacts with the scammer, the influx of additional calls and invoices starts.

  3. Train your staff to avoid saying "yes" on the phone.
  4. To prevent inadvertently giving scammers an opportunity to use your words against you, you and your staff should avoid saying "yes," "correct," "I agree," or similar phrases on the phone. Phone recordings can easily be changed to make it sound like you're agreeing to make a purchase. You can potentially protect yourself by recording all incoming calls in order to challenge a scammer later in court. But make sure you take all appropriate steps to make sure your recording is legal.

    In North Carolina, for instance, only one person on the call needs to agree to being recorded, and that person does not have to get permission or advise the other parties on the line. You can't agree for your staff, so you should take appropriate steps such as getting a signed statement from all employees acknowledging that calls may be recorded or by placing notices on all phones. For incoming calls received from other states that may have privacy laws that override North Carolina's law, have the call introduced with a message advising calls will be recorded.

  5. Inspect all invoices and only pay for verified purchases.
  6. Depending on the size and nature of your business, consider implementing a purchase order system to make sure you're paying only legitimate expenses. If an invoice looks suspicious or is unfamiliar, do some checking before paying it. Even if an invoice is from a legitimate company with whom you do business, it could inadvertently contain an error, be a duplicate of a previous invoice, or be for the purchase of another client that has been mistakenly applied to your business.

  7. Designate only certain staff to interact with outside contacts.
  8. Designate one or two people who have the authority to work with outside callers (or anyone who mails, emails, or faxes) on business matters. Aside from scam protection, this is a great way to ensure that all contacts are getting a consistent business message. If this person is not responsible for approving purchases and paying the bills, he/she should be working closely with the person who does have those responsibilities to ensure only legitimate services and products are purchased. Train these employees aggressively to spot potential scams and to take a step back without fear of reprisal if something looks or sounds fishy. You can reap extra benefits by training them in other ways, such as client retention or customer service, in order to increase your sales or business results!

  9. Check out a new company that is invoicing you or trying to get your business.
  10. Check a company out for free with the Better Business Bureau, with the North Carolina Attorney General's Office (or your state Attorney General's office), and the state Attorney General's office in the state where the other company is supposedly based. While it can take a little bit of time out of your day, it's worth knowing if the company trying to work with you has a bad reputation. Also, remember that Google is your friend. Try doing an online search for the company using words like "complaint" or "scam." If you are pulling up multiple companies with similar names, put the company name in quotes in order to find an exact match. While the information online can contain inaccurate reviews, it can give you an idea of the company's reputation. You may also find something very concrete and telling, such as a court order or consumer protection lawsuit that raises red flags.

  11. File a complaint with government agencies.
  12. While filing a complaint isn't necessarily a way to avoid a scam, it can have trickle down effects. Once you file a complaint with a government agency, many scammers cease contact, remove your information from contact lists they sell, and may even refund you if you already paid in order to avoid scrutiny. You should file a complaint whenever you receive a suspicious call, a suspicious letter, or a clearly bogus invoice. Your complaint may be the first in a long series of complaints and can help get the ball rolling against the scammers. Don't assume that other victims will file a complaint. The vast majority of scam targets unfortunately do not take a few minutes to submit a complaint.

    File a complaint with the Federal Trade Commission (FTC) in order to help shape the FTC's law enforcement agenda and to alert investigators to the scammers. The FTC protects consumers by stopping unfair, deceptive or fraudulent practices in the marketplace.

    If the scam involves the U.S. mail, submit a Mail Fraud Complaint Form to the U.S. Postal Inspection Service. U.S. Postal Inspectors investigate any crime in which the U.S. Mail is used to further a scheme.

    File a complaint with the North Carolina Attorney General's Office or your state Attorney General's Office. The Attorney General is the chief law enforcement officer in the state and has the power to enforce state law against a company and the people in the company.

    While many people think of it as the first place to go, the Better Business Bureau is NOT a government agency and does not have the power to take any action against a company (or scammers), though it does have useful information to help you. Our organization also works to promote consumer protection has worked with the above agencies in the past to shut down fraudulent schemes, such as a deed copy scam targetting homeowners.