Oregon Department of Justice

Attorney General Ellen F. Rosenblum

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AG FILES AGREEMENT WITH FLORIDA BUSINESS DIRECTORY BILLING, LLC

March 3, 2008

Attorney General Files Agreement With Florida Internet Yellow Page Directory Business

Attorney General Hardy Myers today filed an agreement with a Florida Internet yellow page directory business settling allegations that it used deceptive marketing practices in order to obligate Oregon businesses and organizations to pay for its services. Using "live" activation checks, the company allegedly tricked victims into endorsing the checks only to have the company later claim that the checks were actually contracts for online yellow page advertising.

Named in an Assurance of Voluntary Compliance filed in Marion County Circuit Court is Directory Billing, LLC, doing business as USDirectory.com of Boca Raton, Florida. The agreement, which does not admit violation of law, is the result of a multi-state investigation by 26 states led by Oregon, Florida and Missouri. Directory Billing will pay $400,000 to the states, collectively, with Oregon's share of $10,855 to be deposited into its Consumer Protection and Education Fund.

"Oregon is a national leader in its efforts to curb the practice of using "live" activation checks to trick businesses and organizations into signing up for a service they didn't want in the first place," Myers said. "This is the fourth "live" activation check operation against which we have filed actions. Oregon is fortunate that its Legislature enacted one of the first laws in the country to drastically limit the ways activation checks can be used to market a product or service."

Under today's agreement, Directory Billing, LLC agrees not to use activation checks as the means of obligating businesses and organizations to purchase its products and services. The company also agreed to contact its current activation check customers to inform them of their right to cancel their agreement and of the possibility of partial refunds of monies paid to Directory Billing, LLC.

Current customers who were billed through their telephone bill or bank account for a listing and then became customers by depositing an activation check should be contacted by letter within the next two weeks by Directory Billing, LLC. The letter will offer claimants a partial refund if they elect to cancel the yellow page directory service.

The states alleged that for two years, since early 2004, Directory Billing, LLC sent businesses and other organizations "live" activation checks in the mail. These checks were made payable to the business or organization for a small amount, usually $3.25. On the back of the checks, in fine print above the endorsement line, was language stating that by depositing the check, the recipient agreed to purchase advertising from Directory Billing, LLC in its on-line yellow pages directory. The fine print also stated that by depositing the check, the recipient authorized Directory Billing, LLC to bill monthly fees through the business's telephone bill or through automatic debiting of the amount from the bank account into which the recipient deposited the check, or by other methods.

The states' investigation revealed that some activation check recipients deposited these checks without knowing that they were purchasing Directory Billing, LLC's on-line advertising services or that they were authorizing a monthly billing through their telephone bill or through debits from their bank account. In some of these cases, the recipients remained unaware that they were being billed for several months or longer.

Any Oregon business or organization that deposited an activation check from Directory Billing, LLC after January 2004, is currently paying through its telephone bill or bank account, and believes that it deposited the check without understanding the consequences must promptly respond to the company's refund letter.

Customers with questions about this agreement or 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. The Oregon Department of Justice 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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