Operators of scam to pay out nearly $10M
Five companies and three people will have to pay more than $9 million in penalties and pay back all their customers after the Competition Bureau of Canada sued them for operating a marketing scam.
An Ontario court agreed that the eight parties named in the suit violated the Competition Act with "false or misleading representations," the CB said in a news release Friday.
"By using symbols that closely resemble the well-known trademark of the Yellow Pages, the companies and individuals deceived consumers into believing that they were merely updating contact information for an online business directory listing," the CB said.
But "buried in the fine print was a stipulation that, by returning the form, victims were committing to a new two-year contract for a listing at an annual cost of $1,428 with companies that have no relation to the Yellow Pages Group."
Collection agencies were sent after those who refused to pay.
"Since January 2010, Canadian businesses have lost millions of dollars as a result of this scam," the CB said.
Toronto-based Yellow Business Marketing Ltd. and its manager, Brandon Marsh, along with similarly named companies in the U.K. and Spain and two residents of Spain, were ordered to send letters and pay full restitution to the victims of the scheme. They must also post "corrective notices" on all the websites they operated, one for each province and territory.
In addition, the companies have to pay $9,035,000 and the individuals $1,035,000 in penalties.