Oregon Department of Justice

Attorney General Ellen F. Rosenblum

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OREGON AG FILES AGREEMENT WITH TEXAS-BASED YELLOW PAGES DIRECTORIES

December 27, 2007

Oregon Attorney General Files Agreement With Texas-Based Yellow Pages Directories To End Misleading And Deceptive Solicitations Of Oregon Small Businesses

Attorney General Hardy Myers today announced the filing of a settlement agreement with a Texas "yellow pages" operation that deceptively solicited Oregon small businesses by offering free listings in an online "yellow pages directory."

Named in an Assurance of Voluntary Compliance (AVC) filed in Marion County Circuit Court are Ad TelAmerica, Inc. of Dallas, Texas, and its president, Barbara Sommer. Sommer operates Yellow Pages Directories (YPD) in Carrollton, Texas. Oregon Department of Justice (DOJ) investigators found that Sommer lead consumers and businesses to believe YPD is the same Internet-based directory service as "onlineyellowpages.com," which it is not. Onlineyellowpages.com is a division of Yellow Pages Online, Inc., a Nevada corporation. The AVC admits no law violation.

Seven Oregon businesses filed complaints in 2007 with DOJ after receiving phony invoices and solicitations from YPD. The solicitation, complete with the familiar "yellow pages walking fingers" logo, appeared to be a final listing notice for advertisements placed in an online yellow pages publication. The form falsely intimated that the businesses had pre-existing relationships with YPD when they did not and also contained numerous misleading references to offers for free directory listings which disguised the overall cost of the offering. Barely discernable type at the bottom of each solicitation, which businesses were likely to not have discovered, stated that in order to obtain the "free" listings online a semi-annual payment of $298.00 was due for print or compact disc (CD) editions of the directory.

Investigators found that the print and CD editions of the directory were not distributed to consumers and, if actually published, were only sent to other similarly-scammed advertisers on a regional or national level. Oregon consumers apparently never received copies of either edition. Investigators requested copies of the directories from YPD but never received them.

Businesses that replied to the free solicitation and refused to pay bogus invoices after realizing they were misled, were turned over to collection agencies.

"This is not the first company we have stopped from using phony solicitations when selling yellow page advertising," Myers explained. "The method of operation is similar in several cases: the solicitation contains hidden costs and falsely implies a pre-existing relationship. In addition, if the worthless books or CDs were distributed, it was on a limited basis and only to other advertisers, not to the intended consumer audience."

"It is imperative that Oregon small businesses protect their bank accounts by verifying that advertising offers they accept are from trusted sources," Myers added.

DOJ has taken enforcement actions against YPD in the recent past. In January 2007, investigators issued a letter warning the company of possible violation of Oregon's Simulated Invoice law and in September 2007, DOJ filed suit in Yamhill County Circuit Court. As part of today's settlement agreement, DOJ requested that the lawsuit be dismissed with prejudice.

Under the agreement, the business complainants who paid money to YPD will receive refunds and billings will be canceled for the businesses that did not pay for the directory or CD. YPD paid $4,500 to the DOJ Consumer Protection and Education Fund and agreed to stop its misleading business solicitation practices by clearly stating when materials are solicitations and not invoices and describing the actual costs of services. In addition, YPD cannot imply in its solicitations that a pre-existing business relationship exists.

Businesses and consumers wanting more information about this settlement or Oregon consumer protection in general may call the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) or toll-free at 1-877-877-9392. DOJ is online at www.doj.state.or.us.

Contact:

Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us |
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