Local businesses have reported being contacted by or receiving what appear to be invoices from bogus print or online “Yellow Pages” directories. Hawaii’s BBB warns that these invoices are actually solicitations for listings in alternative business directories that are not connected with the well-known Yellow Pages.
The solicitation may look like a legitimate invoice, use the name Yellow Pages, include the familiar logo, or falsely state that the publisher is affiliated with a local telephone service or bona fide business directory. But it’s not; it’s a form of fraud run by international scam artists.
Because the name “Yellow Pages” and the “walking fingers” logo are not protected by any federal trademark registration, they can be used by anyone. One company that used the deceptively similar name of “HawaiianTel-YP” has recently re-emerged as “Islandtel-YP.” After contacting local small businesses, it follows up with falsified invoices for continued service.
Across the U.S., BBB and the Federal Trade Commission (FTC) have seen an increase in this form of fraud. Small and medium-sized businesses, churches, and nonprofit groups have been hardest hit. Many will pay the phony invoices in the mistaken belief that it’s simply a misunderstanding.
How the Scam Works The con artists sometimes make cold calls to local offices. They ask the person answering the phone to “confirm” the address, telephone number, and other information, claiming it’s for the business’s directory listing. The scammers then fire off a rapid series of questions they may record, sometimes sliding in a confusing reference to the cost. The scam works because fraudsters convince the person who picks up the phone that they’re just “verifying” an arrangement the company already has with the directory.
The scammers may also send urgent “invoices” and sometimes include a copy of the “directory” or link to an online listing. They’re usually worthless and are never distributed or promoted as promised. 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. But if businesses resist, the scammers turn up the heat, threatening collection or legal action to get payment. They may use the name of the person who answered the phone or play a “verification tape” as “proof” that the company owes them money. Often these tapes have been doctored or the nature of the transaction was rattled off in a way no one could have understood. If companies stand firm in their refusal to pay for services they didn’t authorize, the scammer may try to smooth things over by offering a phony discount. Or they may let the company return the directory—at the company’s own cost, of course—but insist on payment for the so-called listing. At this stage, many companies pay up just to stop the hounding. What they don’t know is that they’ll likely get more bogus invoices—either from the same scam artist or from others who have bought their contact information for a new scheme.
How can I protect my business? Take the following four steps to protect your company from business directory fraud:
- Train your staff to spot this scam. Educate employees about how this scam works. Talk to everyone who may pick up the phone. E-mail or put a copy of this alert in employee mailboxes. Mention it in a staff meeting. Post it on the break room bulletin board, or where staff clocks in and out.
- 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. Train your staff to send all inquiries to them. Compile a list of the companies you typically use for directory services, office supplies, and other recurring expenses. Encourage the people who pay the bills to develop a “show me” attitude when it comes to unexpected invoices from companies they’re not familiar with. Don’t pay for products or services you’re not sure you ordered.
- Verify to clarify. Many business directory scam artists are headquartered in Canada, but use post office boxes or mail drops to make it look like they are in the United States. Before paying, check them out at bbb.org.
- File a complaint. If a scammer is sending you bogus bills, speak up. File a complaint with Hawaii’s BBB, and let the FTC know by filing a complaint or calling 1-877-FTC-HELP (1-877-382-4357). Your complaints help shape the FTC’s law enforcement agenda, so it’s important to sound off when you spot a scam.
Concerned about business directory fraudsters’ threats to tarnish your credit if you don’t pay? Many will simply drop the matter and may even provide a refund if they know you’ve complained to BBB and law enforcement.
For more trustworthy business advice, visit Hawaii's BBB Business Resource Library.
