The Federal Trade Commission has filed suit to halt the illegal operations of three telemarketing boiler rooms in Montreal, Canada.

The agency alleged that the telemarketers bilked thousands of small- and medium-sized U.S. businesses and non-profits, including churches, schools, and charities, out of millions of dollars by deceiving them into paying for listings they never ordered in worthless business directories.

The FTC lawsuits, filed in federal court in Illinois, are part of a joint initiative with Canadian law enforcement authorities called Operation Mirage that is aimed at cracking down on business directory scams. The FTC charged that the three telemarketing operations targeted businesses and other organizations with schemes to mislead them into paying hundreds of dollars each for unwanted business directory listings. The court has issued temporary restraining orders in the three cases.

In their phone calls to businesses and non-profits, the telemarketers often have posed as well-known local yellow pages directories, and have told employees who answer the phone that they are calling to verify addresses and telephone numbers, the FTCs complaints stated. The telemarketers then used the verifications as the basis to claim that these organizations agreed to listings that often cost $400 or more.

The FTC alleged that the companies then sent their victims invoices that again often imply that they are well-known yellow-pages companies. Many businesses and organizations simply paid these invoices. Those that did not were harassed with threatening phone calls and letters. To hide their location, the companies have used mailing addresses around the United States, in Miami; Phoenix; Plattsburgh, New York; Port Barre, Louisiana; Russell, Illinois; Milwaukee, Wisconsin; and Jersey City, New Jersey, the FTC alleged.

The FTCs complaints alleged that the companies made three misrepresentations that violated the FTC Act. First, they led the small businesses and non-profits they targeted to believe that there was a pre-existing relationship between them. Second, they falsely claimed that those organizations had agreed to purchase directory listing services. Third, they falsely claimed that the organizations owed money for these supposed services.