The Yellow Page Business Directory Invoice Scam Continues to Claim Victims
This tricky scheme most frequently targets small businesses, nonprofits, churches, credit unions, and local government agencies
Businesses of all sizes should be on alert for fake invoices for listings in the Yellow Pages or other business directory.
Reports of this scheme have increased dramatically in recent months.
How does the scam work?
The Yellow Pages or business directory scam is pretty simple, yet remarkably easy to fall for. While a business of any size is at risk of falling victim to this tricky scheme, it most frequently targets small businesses, nonprofits, churches, credit unions, and local government agencies.
The con usually begins with a phone call—though mail, email, and fax are also utilized for this ruse. The caller wants to "verify" or "confirm" a company's contact information for a listing in a business directory.
In reality, there is no real listing—and maybe not even a real business directory—but the employee who picks up the phone doesn't know that. The persuasive caller tricks the employee into saying yes. Later, if the company complains it didn't agree to the listing, the fraudsters may play back a tape of the call (which might have been doctored) as "proof."
Here Come the Invoices
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 to the email or fax, the company is agreeing to an expensive business directory listing.
Once the listing information has been "confirmed," the scammers will begin sending "urgent" invoices for 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—which may or may not even exist.
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 con artists will even go as far as threatening 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 companies stand firm in their refusal to pay for services they didn't authorize, the fraudster may try to smooth things over by offering a phony discount—or they may agree to cancel the listing going forward to stop any new bills. At this stage, many companies pay up just to stop the incessant phone calls and mailings.
To make matters even worse, these scammers will often sell their contact lists—meaning that businesses can be targeted from multiple sources over a period of weeks and months.
Avoiding Business Directory Scams
So what can you do to protect your business or organization from this kind of fraud?
- Train your staff. Educate your employees about how these scams work. In fact, send them a link to this article.
- Inspect your invoices. Depending on the size and nature of your business, consider implementing a purchase order system to make sure you're paying only legitimate expenses. At a minimum, designate a small group of employees with authority to approve purchases and pay the bills.
- Verify to clarify. Check a company out for free at BBB.org or with the North Carolina Attorney General's Office (or your state Attorney General's office). You can also try doing an online search using the company name and words like "complaint" or "scam."
- File a complaint. If you're getting bogus bills, file a complaint with the Federal Trade Commission (FTC). Complaints help shape the FTC's law enforcement agenda, so it's important to sound off when you spot a scam. If the scheme involved the U.S. mail, submit a Mail Fraud Complaint Form to the U.S. Postal Inspection Service. You should also file a complaint with the Attorney General's Office.
Many of the con artists who perpetuate this scam will drop the matter and cease contact with you if they know you've filed a complaint. Some may even offer a refund if you've paid them money.