Attorney General's News Release

January 4, 2007

Second company in a month ordered to pay restitution for deceptive use of "activation checks" to sell Internet listings

Jefferson City, Mo. — Missouri businesses and other organizations that often unknowingly paid for a listing on an Internet "yellow pages" directory can file claims for restitution from the California company that allegedly misled and billed them, Attorney General Jay Nixon says.

Nixon obtained a consent judgment today in Cole County against Anaheim-based Yellow Pages Inc. (YPI) requiring YPI to pay full restitution to consumers who file complaints and stop certain marketing practices that Nixon says are deceptive. The order follows a restitution order last month in a 34-state settlement led by Missouri against an unrelated Nevada company, YP.com, which used similar tactics as YPI.

YPI solicits and sells listings in both a business-to-business directory and a "yellow pages" directory on the Internet. YPI and its owner, John Wurth, were the subject of complaints that the company misled small businesses, churches, schools and other consumers through its use of "activation" checks. YPI would mail the unsolicited checks to the recipients, neglecting to adequately inform them that when the checks were cashed, the businesses or other organizations were automatically enrolled for the company's services. Recipients who cashed the checks would then be unknowingly obligated to a contract for one year of the defendants' directory advertising services, and were billed for $177 to $179 for the service. Accounts that were unpaid often were turned over by the defendants to a collection service.

"Receiving an unsolicited check in the mail should always give every small business pause, as such enticements can end up socking them with some unexpected costs once the check is cashed," Nixon said. "We're pleased that another company that engaged in such misleading tactics won't be preying upon Missouri small businesses, churches, schools or other consumers anymore."

Under the judgment, YPI is prohibited from sending Missouri businesses and consumers any solicitations in the form of a check which, when cashed, obligates the consumer to pay for any of the defendant's services or from attempting to collect payment from any prior customers. YPI is also required to provide a refund to any prior-paying Missouri consumer who files a complaint with the Attorney General's Office by February 28, 2007. Complaints to Nixon's office can be filed online at ago.mo.gov. YPI also will pay $10,000 to the state to pay for the costs of the investigation, prosecution and enforcement of the case.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

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