Operators of Online Directory Scam Ordered to Pay $1.2 Million

Operators of Online Directory Scam Ordered to Pay $1.2 Million
Image: Pixabay
December 2, 2015

A federal court has banned Montreal-based operators of a business directory scam from the directory business and ordered them to pay the Commission more than $1.2 million to use for reimbursing victims of the scam.

The order resolves Federal Trade Commission (FTC) charges filed in March 2015, which the defendants, Ivan Chernev, German Lebedev, and their companies, billed small businesses and nonprofits in the United States for unwanted listings in online yellow pages business directories.

The court halted the operation and froze the defendants' assets pending litigation. The defendants did not respond to the FTC's allegations and the court has entered a default judgment and order against them.

Using a variety of business names, the defendants sent medical practices, churches, and retirement homes unsolicited invoices with the familiar walking fingers image, seeking $480.95 or a similar amount for a one-year directory listing. When consumers ignored the invoices, the defendants sent collection warnings demanding payment of more than $2,000. When consumers still refused to pay, the defendants sent dunning notices, posing as a third-party debt collector.

The court order prohibits the defendants from misrepresenting material facts about any product or service, profiting from customers' personal information and failing to dispose of it properly, and trying to collect payments for any business directory listings. The $1.2 million judgment imposed by the order must be paid within seven days.