Government

Attorney General Abbott reaches agreement to protect small businesses

From the Office of Greg Abbott, Attorney General of Texas

December 21, 2006

EL PASO–Texas Attorney General Greg Abbott Dec. 14 announced that some Texas business owners may be eligible for a refund of fees they unwittingly paid to an Arizona company for advertising in its online "yellow pages" directory.

Texas and 33 other states reached an agreement Dec. 14 with YP Corp. and its online services, YP.net and Yellow-Page.net, over allegations that the company used "live" activation checks to trick business owners into initiating contracts and paying monthly fees for advertising services.

"Small and locally-owned businesses are critical to the future of the Texas economy," said Attorney General Abbott. "The Office of the Attorney General is committed to keeping small businesses safe from deceptive or misleading marketing practices. We are committed to a Texas that fosters a burgeoning business community and protects small businesses."

The "live" activation checks YP Corp. mailed to thousands of businesses in Texas and around the country gave the appearance that the company had a pre-existing business relationship with the customers. The checks were made payable to the businesses, usually in small amounts of approximately $3.25. When business managers deposited or cashed the checks, they unknowingly entered into a contract with YP Corp. for an enhanced "Internet Advertising Package." Activating the check also triggered YP Corp., through its billing company, Telco Billing, to begin collecting monthly fees that were tacked on to their telephone bills or automatically withdrawn from the bank accounts into which the businesses deposited the checks.

Many businesses that cashed checks from YP Corp. assumed the small amounts were merely refunds or rebates. They were not aware of fine print on the reverse of the check explaining that depositing the check construed a contractual advertising agreement with YP Corp. Because businesses were unknowingly purchasing these services, the Texas Office of the Attorney General contended that YP Corp. had committed numerous violations of the Texas Deceptive Trade Practices Act.

The Texas Attorney General's Consumer Protection Division has determined that over 60,000 Texas business customers deposited checks. Customers who were unknowingly signed up with YP Corp., but who did not intend to purchase Internet advertising services may be eligible for restitution under the multi-state settlement.

Any Texas business or organization that deposited an activation check from YP Corp. since January 1, 2003, was billed for an online yellow page listing, and did not intend to enter into such a contract should contact the Texas Attorney General's Office no later than March 15, 2007, to request a refund.

Existing YP Corp. customers who believe they entered an advertising contract by depositing an activation check will be contacted directly by the company within the next few weeks with instructions on how to cancel their relationship with YP Corp. and request a refund.

Consumers who believe they may have been defrauded in this or a similar manner may contact the Office of Attorney General at (800) 252-8011 or file online at the agency's Web site at www.oag.state.tx.us.