Two online schemes that targeted small businesses, non-profits, and religious organizations were shut down, banned from the industry, and must reimburse victims, the Federal Trade Commission said on Monday.
The two operations, one based in Montreal and the other in Oklahoma City, were accused of "defrauding small businesses and nonprofits by charging them for online business directory listings they had not ordered or received."
This is a common scam aimed at small businesses, often, as in this case, involving fake invoices with an image associated with the directories.
Under the settlement agreement, Montreal-based Francois Egberongbe, Robert N. Durham, Sr., and 7051620 Canada Inc. agreed to pay $1.7 million to reimburse those who were victimized in the scam, the FTC said.
Oklahoma-based Your Yellow Book Inc. (YYB), Brandie Michelle Law, Dustin Robert Law, and their father, Robert Ray Law, were accused of "defrauding small businesses, doctors' offices, retirement homes, and religious schools."
The FTC said the operations would contact various companies and organizations asking that they verify or update information that was in the Your Yellow Book directory, and then pay as much as $487. Many of those who received the calls paid the fee because they believed that they were just renewing a prior agreement someone in the organization had made to be listed.
Your Yellow Book and its principals face a $715,476 judgment, part of which will be suspended due to the inability to pay. Dustin Law was ordered to sell a vehicle, boat, and camper, the proceeds of which will be used for restitution.
The FTC offers these tips to help businesses and organizations from falling victim to similar scams:
- Read the FTC's information on small business scams, which outlines how con artists target businesses. Share it with your staff, including receptionists and administrative personnel, to help them spot and stop a business scammer.
- Designate a point person for office supplies, directory listings, subscriptions, and other things you buy periodically. Tell your staff that all purchasing calls should go through that person, and keep a central file of your usual suppliers.
- Use your company's social networks to educate others about the telltale signs of a business scam.
- Encourage professional associations or local business groups to issue a warning to members.
- Take a minute to share this information in your community -- fraudsters often target churches and other nonprofits that depend on volunteers.