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Online Business Directory Marketer Must Pay $10 Million, Refrain from Marketing Directories

By Jeffrey May, J.D.

The FTC announced on November 27 that a European-based operation charged with deceiving small businesses and nonprofit organizations into paying for unwanted listings in online business directories has been ordered by the federal district court in Chicago to pay more than $10.2 million as equitable relief for consumer injury and to refrain from marketing Internet directories and listings in the future. The court's default judgment also prohibits the defendants from collecting payments from their previous customers, disclosing or otherwise benefitting from customers' personal information, and failing to dispose of the information properly (FTC v. Yellow Page Marketing B.V., FTC File Nos. 112 3119 and X110044, Case No. 1:11-cv-05035).

The FTC alleged in a July 2011 court complaint that unsolicited faxes were sent by the operation that deceived businesses and organizations into believing they were merely updating their local yellow pages listing, but were actually agreeing to pay for a listing in the operation's online directory. The defendants-Yellow Page Marketing B.V., its owner, and related companies-allegedly ran the scheme from Spain, using English and Dutch corporations.

The court found that the defendants falsely represented to consumers, expressly or by implication, that the defendants had preexisting business relationships with the consumers and that the defendants were the publisher, or were affiliated with the publisher, of the consumers' local yellow pages directories. The default judgment prohibits these misrepresentations.

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