SEATTLE – Attorney General Rob McKenna today announced a multi-state settlement in a lawsuit against YP Corp. and its subsidiary, Telco Billing, Inc. The businesses will pay more than $2 million to resolve allegations they deceptively marketed phone listings and advertisements on internet yellow pages. The money includes reimbursements for businesses and organizations in Washington and 33 other states that paid for online advertisements they did not want.
"YP Corp. and Telco Billing mailed checks that were supposedly agreements to purchase listings and advertising on the companies’ online yellow pages," McKenna said. "Many businesses and organizations that deposited the checks were billed for multiple months before they discovered they were paying for a service they did not want. Under Washington law, consumers must give affirmative consent before obligating themselves to purchase products or services."
Under an agreement filed today in King County Superior Court, YP Corp, of Mesa, Ariz., will reimburse businesses and organizations that request refunds for recent payments. The settlement resolves the lawsuit that was also filed today.
In addition, the company will pay $1.9 million to the states that will be used for additional reimbursements and consumer education. Washington’s share is about $45,800 and will be used to refund businesses and organizations who do not receive full refunds directly from the company. (Please see eligibility requirements and instructions below.)
YP Corp. will also pay $910,000 for state attorneys’ costs and fees; the Washington Attorney General’s Office will receive $15,000 of the total. The agreement does not include an admission or finding of wrongdoing.
YP Corp. sells business listings and advertising on several yellow pages sites, including YP.com, YP.net and Yellow-Page.net. Telco Billing, of Las Vegas, Nev., is a wholly owned subsidiary that provides marketing, sales and collections for YP Corp.
According to a complaint also filed today by the Washington Attorney General’s Office, YP Corp. sent checks for small amounts, usually around $3.50, to companies and organizations in Washington and other states since at least Jan. 1, 2003. Fine print on the back above the endorsement line stated that by depositing the checks, the recipient agreed to purchase advertising from the company.
Once the checks were deposited, the defendants immediately billed the businesses $27.50 to $39.95 each month for services. The fees were listed as a line item on the business’ monthly phone bill or automatically withdrawn from the bank account in which the check was deposited.
The Washington Attorney General’s Office has received complaints from 110 businesses and organizations concerning the defendants’ billing practices. Nationwide, more than 82,000 businesses and organizations paid for the listings as a result of depositing one of the checks.
Many businesses and organizations were billed for services without their knowledge or express consent. Some assumed the checks related to another business, such as advertising purchased from another yellow pages publisher.
YP Corp. and Telco Billing stopped using activation checks in October 2006 after a number of states began investigating their practices. The settlement prohibits the companies from sending future solicitations in the form of a check and from collecting payments from consumers who previously cashed checks until those customers have been contacted by mail.
YP Corp. must notify approximately 57,000 current customers nationwide that they are paying a monthly fee and inform them of their right to a refund should they believe they unknowingly purchased services.
Besides Washington, states participating in the settlement include Alaska, Arizona, Arkansas, California, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, West Virginia and Wyoming.
McKenna said that companies should not use checks as a means to trick customers into unknowingly enrolling for services or products. Washington and 26 other states settled a similar case last year with California-based Yellow Pages, Inc., which was accused of mailing checks that appeared to be from companies where the recipients had an existing account, but were actually agreements to purchase new online listings. Earlier this week, McKenna announced a multi-state settlement with Chase Bank and Trilegiant Corp. that resolves allegations the companies used checks to enroll consumers into memberships that purportedly provided discounts for certain goods and services.
Washington businesses and organizations that purchased online ads from YP Corp., YP.com, YP.net, Yellow-Page.net or Telco Billing by means of cashing an activation check are eligible for refunds.
Eligible consumers should file claims with YP Corp. per the instructions below. They should also file complaints with Attorney General’s Office to be considered for additional reimbursements.
The amount of restitution that businesses and organizations will receive depends on several factors.
- Under the settlement, the defendants will provide full refunds of billed services to those current customers who cashed checks between Aug. 14, 2006, and Dec. 14, 2006.
- Current customers who were billed for services prior to Aug.14, 2006, will receive two months’ worth of payments from the defendants. That means the defendants will not reimburse those consumers for additional payments made before or after that time. However, consumers may qualify for additional restitution from the state of Washington.
- The Washington State Attorney General’s Office will receive an additional $45,800 to reimburse those that paid more than the amount they will receive directly from the defendants.
YP Corp will send current customers a refund letter including a self-addressed stamped envelope by Jan. 3, 2007. Return the completed refund form to YP Corp by Feb. 28, 2007, to collect a refund. Businesses and organizations that previously purchased services from YP Corp. but no longer have accounts will not receive letters from the company.
Consumers who were billed by the defendants for unwanted services should also file a complaint with the Attorney General’s Office by March 14, as they may be eligible for additional reimbursements from the state. Complaints can be filed online at www.atg.wa.gov or call 1-800-551-4636 to receive a form by mail.
For additional information about the settlement, contact the Attorney General’s Consumer Protection Division at 1-800-551-4636. Residents of other states should contact their local Attorney General’s Office.
Important warning for consumers: Con artists have sent letters to Washington residents informing them that they have received payments from a lawsuit settlement. The mailings often include counterfeit checks. You should be especially suspicious of letters and phone calls originating from outside the United States in which you are asked to provide money or personal information.
If you receive a legitimate letter from YP.Com, you will be asked to confirm your company name, address, and your YP.Com account and mail your request to the company’s address at 4840 E. Jasmine St., Ste. 105, Mesa, AZ 85205.
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Media Contacts: Kristin Alexander, Public Information Officer, (206) 464-6432,
Paula Selis, Assistant Attorney General, (206) 464-7662