Competition Bureau Sues to Shut Down Business Directory Scam
July 28, 2011
The Competition Bureau announced today that it has taken action against five companies and three individuals to ban their deceptive marketing conduct targeting small and medium-sized businesses.
An international investigation led by the Bureau uncovered a scheme that marketed online directories to Canadian and international businesses, in violation of the false or misleading representations provisions of the Competition Act.
The network of companies targeted by the Bureau's action include: Yellow Business Marketing Ltd., the Toronto-based agent for Yellow Publishing Ltd. and Yellow Data Services Ltd., both located in Manchester, UK; Yellow Page Marketing B.V., the principal company, and Backoffice Support SL, located in Spain, the administrative support of the operation. The individuals sued are Brandon Marsh, manager of Yellow Business Marketing Ltd. and two Spanish residents, Jan Marks and Steve Green, who directed the scheme.
The network has been in operation since January 2010, and has created business directory Web sites for each of the Canadian provinces and territories. The Web sites follow a common naming convention, e.g. www.yellowpage-ontario.com, prominently displaying the words "Yellow Page".
One-page faxes were sent to thousands of small and medium-sized businesses located throughout Canada and other countries, including but not limited to the United States, United Kingdom, Australia, New Zealand and Austria. Recipients were misled into believing that the fax originated from the Yellow Pages Group, the long-time publisher of paper and online directories and owner of the legitimate Yellow Pages Group trademark, and that its purpose was to simply confirm company information in an online directory.
However, businesses that signed and returned the faxes received invoices demanding payment for allegedly having agreed to a two-year listing in the targets' online directory. Buried in the fine print on the faxes is a difficult-to-locate note that states that those signing the fax are committing to pay the targets $1,428 per year, for a two-year listing in their online directory. If the businesses refuse to pay, then collection actions are initiated. Since January 2010, Canadian businesses have lost millions of dollars as a result of this scam.
Example of a deceptive logo resembling the Yellow Pages Group trademark:
Cooperation between the Bureau and its international law enforcement partners has been invaluable in bringing this action forward. In addition to the support of the U.S. Federal Trade Commission, the Australian Competition and Consumer Commission, and the National Fraud Intelligence Bureau of the UK, the Bureau also acknowledges the support of the International Consumer Protection and Enforcement Network, an organization of consumer protection authorities from almost 40 countries, and the International Mass Marketing Fraud Working Group for playing a key role in assisting international law enforcement agencies.
The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.
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