March 03, 2008

Attorney General Corbett announces a multi-state settlement with Internet advertising company over deceptive marketing practices

HARRISBURG - Pennsylvania, along with 25 other states, reached a settlement with an Internet advertising company that allegedly tricked consumers, businesses and organizations, such as churches and community groups, into purchasing and paying for Internet advertising services.

Attorney General Tom Corbett said that USdirectory.com incorporated of Directory Billing, LLC, was accused of sending checks in the amount of $3.25 to consumers, businesses and organizations in Pennsylvania from approximately January 2004, until May 2006.  By depositing this activation check, recipients entered into a contract with Directory Billing to purchase Internet advertising services at a cost of $29.95, $34.95 or $49.95 per month.

According to court documents, consumers, businesses and organizations who deposited this check were then billed either through their telephone bills or by automatic withdrawals from their bank accounts for Internet advertisements that the "vast majority" didn't request or want. 

"Although there were disclosures included with the checks that regarded the terms of services and consequences of endorsing the checks, they were confusing and misleading," Corbett said.

"There are 1,240 consumers in Pennsylvania who are currently paying this company for their services," Corbett said.  "In most instances, the consumers don't realize that they're being charged."

As part of the settlement, Directory Billing has agreed to:

• Permanently refrain from mailing activation checks in Pennsylvania.
• Send notices to customers that explain how to cancel services and receive refunds.  The refunds, which will be for the amount of the last two payments, will be available to current customers who deposited an activation check and are being billed either through their telephone bill or bank account.
• Pay the Commonwealth $13,514 for the purpose of providing restitution to Pennsylvania consumers and $7,292 for costs

Corbett said the settlement with Directory Billing affects consumers in Pennsylvania and 25 other states.  In addition to Pennsylvania, the settlement includes Alaska, Arizona, Arkansas, California, Connecticut, Delaware, Florida, Idaho, Illinois, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Oregon, South Carolina, Tennessee, Texas and West Virginia.
 
Corbett urged Pennsylvania consumers, businesses and organizations who believe that they are victims of this deceptive marketing program to call the Attorney General's Bureau of Consumer Protection at 1-800-441-2555 to file a complaint.  Consumers can also file a complaint online using the Attorney General's website, www.attorneygeneral.gov.

Corbett also suggested that consumers monitor their monthly telephone bills and bank statements to check for unauthorized charges.   If consumers discover any unauthorized charges, they should contact their telephone company or bank to dispute the charge and file a complaint with the Attorney General's Bureau of Consumer Protection.

The agreement, in the form of a Consent Petition, which will require court approval, was filed in Commonwealth Court by Deputy Attorney General Sam Mirarchi of the Attorney General's Bureau of Consumer Protection.

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