The Illinois Attorney General's Office has settled the lawsuit against a Las Vegas corporation over charges it scammed money from small business owners in a practice known as "cramming." Cramming describes charges added onto phone bills for services consumers are unaware of, did not order or did not want.
The settlement with YP.com, which incorporated under the name Live Deal, Inc., requires the company not solicit or bill any new Illinois consumers for Internet Yellow Page listings.
"This company operated under a guise of free Yellow Page listings, but in reality was deceiving unsuspecting businesses," said Attorney General Lisa Madigan. "When business owners attempted to stop the additional charges and cancel the service, they found they couldn't get through to company representatives."
The lawsuit against Live Deal for violating the Consumer Fraud and Deceptive Business Practices Act was filed in November 2008. Madigan's Consumer Fraud Bureau received more than 20 phone bill cramming complaints against YP.com before filing the complaint.
The company's practice was to call small business owners to "confirm" their information for free Yellow Page listings. In fact, the listings were free for only 30 days. If the consumer did not take action to cancel the service after 30 days, the company crammed a $35.95 monthly fee onto the consumer's bill. Consumers who tried to cancel this service had difficulty because the customer service line was continually busy.
ConsumerAffairs.com also received complaints about the company's policies.
Kathy of Flushing, MI, says she was offered one month free. "I called and canceled the service after one month. They started sending me invoices. I called after two invoices telling them I had canceled the service. They said they had no record of the cancellation. I wrote to them canceling the service. I continued to get more invoices so I called them again. They stated that I never canceled. I am not sure how to stop this situation."
"Our company got an invoice of 79.90 for two month listing in their Internet advertising package," writes Dr. of Plano TX . "We do not recollect asking to be listed by them. I called their 1-800 number listed on their invoice and was told that we had requested to be listed and that they had a recording of the same. I asked them to play the recording but eventually got nowhere with hearing it."
Cleaning up its act
Under the agreement, Live Deal must also increase transparency to its solicitation practices to better inform consumers of its sales process for any product it intends to sell. The court also ordered the company to pay $10,000 and any remaining consumer refunds.
Consumers affected by the scheme have until Oct. 30, 2010, to apply for a refund or credit for unauthorized charges. Small businesses can download a consumer complaint form or by calling the Attorney General's Consumer Fraud Hotline at the following numbers: