Don't get scammed! Small businesses targeted by recent scam
By CO Staff @canadaone | June 8, 2011
EDITOR'S UPDATE: The Competition Bureau is seeking an injunction to put an immediate end to the deceptive marketing representations, freeze corporate assets for future restitution to victims, and stop the deceptive conduct. They have taken action against five companies and three individuals. See the Bureau's press release for more information.
People are getting smarter when it comes to recognizing scams. But scammers are getting smarter, too.
Not the first of its type, a fraudulent directory advertising solicitation has emerged.
Done via fax, the scam is very similar to a number of others that, like the present one, use logos or names that are almost identical to the Yellow Pages Group.
Most recently, business owners have been receiving faxes from "Yellow-Page-Canada.com" that consist of a form with their information and a request to confirm it.
But be wary: the company is not Yellow Pages, and the form is not to confirm information. The fine print at the bottom of the sheet actually registers companies for an online business directory for a period of two years at $129 per month. In short, it's a contract.
The scam seems to be targeting small businesses, notably medical practices. And it's doing so in a sneaky but intelligent way.
The scammers are slightly adjusting names and logos from a trusted brand, Yellow Pages, to dupe people into entering these contracts.
Owners who are busy trying to run their businesses glance over the form, believe that they are updating or confirming their information with Yellow Pages, and send it back, not knowing they have signed up for a business directory service.
A number of businesses have been hit with invoices for a service they weren't even aware they were using. Should they pay? Should they ignore it? How can businesses avoid becoming victims?
These tips should help you avoid entering into such a contract unknowingly and give you advice on what to do if you already have.
Look for warning signs
This wave of fraudulent directory ad solicitation is just the most recent in a series of similar scams, all of which have used logos and names that closely resemble Yellow Pages.
Both Yellow Pages and the Competition Bureau of Canada have been working together to address issues of duplicitous solicitation and trademark infringement, with both releasing a variety of resources geared toward protection and fraud prevention.
In May of 2010, the Competition Bureau released a statement warning about such deceptive business practices, which gives the following advice:
- Read the fine print to understand what you are agreeing to;
- If you believe you have received an order form (via fax or other means) from a particularly well-known company, you should look up its number in the phone book or online and contact the company to confirm whether they actually sent the offer; and
- When reviewing bills or invoices you receive, confirm that you actually agreed to purchase the product or service involved before paying.
Yellow Pages Group also released its own statement, warning people to watch for this type of solicitation. First and foremost, they have made it very clear that they never solicit by fax, so be sure to confirm that you are in fact corresponding with the real Yellow Pages.
They also provide a guide to protect your business from falling prey, and suggest that people watch out for:
- A misused logo or name similar to Yellow Pages (ex: Yellow Pages New Brunswick);
- A confusing or strange address, often from overseas;
- A fictitious reference or account number; and
- A threat that your listing will be deleted.
For a comprehensive visual guide on what to look out for, visit Yellow Pages Fraud Prevention Release.
You are receiving invoices: what to do
For business owners who are already receiving invoices, there are a few options available.
Ned Levitt, a partner at Aird and Berlis LLP, suggests that businesses don't spend a lot of money on a lawyer.
"The chance of companies like this pursuing collections [in court] is slim to none," Levitt says. "Generally speaking, that kind of deceptive practice is using something to make it look like something it isn't."
Levitt adds that if litigated, the company conducting the scam could be apprehended for misrepresentation, deceit, or even fraud, so the chances of a business being taken to court for non-payment is unlikely.
For their part, the Competition Bureau of Canada suggests that people consult with a lawyer or the Better Business Bureau, which has listed this as one of the top scams of 2011 on their website.
In the end, the best way to protect yourself is to be cautious. Carefully read whatever is sent to you, confirm that you are dealing with a reputable company, and keep an eye out for anything that seems suspicious. Being vigilant will ultimately help you avoid problems.
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