News Release - Internet Directory Company Settles With 26 States Over Activation Checks for Business Listings

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Attorney General Bill McCollum News Release

March 3, 2008

en Español

Print Version

Media Contact: Sandi Copes
Phone: (850) 245-0150

Internet Directory Company Settles With 26 States Over Activation Checks for Business Listings

~ “Live” activation checks subscribed companies for the listing without their knowledge ~

TALLAHASSEE, FL – Attorney General Bill McCollum today announced that an online yellow pages directory company has reached a settlement with Florida and 25 other states over allegations it used “live” activation checks to subscribe businesses to the directory’s listing. Directory Billing, LLC, which does business as USDirectory.com, was sued in late December for allegations that the checks sent out in advertising solicitations did not sufficiently disclose that cashing them would cause consumers to be billed a monthly charge directly to their telephone bill or bank account. The settlement will provide restitution for Florida-based companies that cashed the checks without realizing they would be subscribed to the monthly charges.

“Companies should work to ensure that advertisements are not misleading or they will find themselves in our sights,” said Attorney General McCollum. “Customers should not be charged for services they never requested.”

The Attorney General’s lawsuit alleged that since early 2004, Directory Billing sent businesses and other organizations “live” activation checks which were made payable to the business or organization for a small amount. The disclosure on the back of the checks which explained that by depositing the check, the recipient agreed to purchase advertising from Directory Billing, was neither clear nor conspicuous and many businesses may have been unaware the disclosure existed. The states’ investigation revealed that some check recipients who had deposited the checks did so without knowing that they were purchasing Directory Billing’s on-line advertising services or that they were authorizing a monthly billing through their telephone bill or through debits from their bank account.

According to the terms of the proposed consent judgment, which must be approved by a Florida court, Directory Billing has agreed to not use activation checks to subscribe businesses to its products and services. The company also has agreed to pay $400,000 to the states to be used for restitution to former Directory Billing customers that did not understand the consequences of depositing the activation check and to reimburse the states for their investigation costs. Directory Billing will also contact its current activation check customers to inform them of their right to cancel their agreements and their potential eligibility for partial refunds.

Within the next two weeks, Directory Billing will send letters to current customers who are being billed through their telephone bill or bank account for a listing and who became a customer by depositing an activation check. The letter will advise them of their current billing status and let them know they are eligible for a partial refund if they elect to cancel. Any Florida-based business or entity that deposited an activation check from Directory Billing since January 2004, paid the monthly charges, and believes it did so unknowingly and without understanding the consequences of depositing the check, may file a complaint with Attorney General McCollum’s Office within the next 30 days to participate in this settlement. Complaints can be filed by calling the fraud hotline at 1-866-966-7226 or online at http://www.myfloridalegal.com.

A copy of the consent judgment is available here.