CHICAGO (Legal Newsline) - Illinois Attorney General Lisa Madigan announced on Wednesday that she has reached a settlement with a Las Vegas corporation that allegedly scammed money from small business owners through a process known as "cramming."
YP.com, incorporated under the name Live Deal, Inc., allegedly added charges onto phone bills for services customers weren't aware of, didn't order or never wanted. Those charges are known as "cramming." Madigan's office received more than 20 complaints about the company.
The lawsuit, filed in November of 2008, alleged that Live Deal violated the Consumer Fraud and Deceptive Business Practices Act by calling small business owners to "confirm" their information for free Yellow Page listings, when in fact the ads were only free for 30 days.
If the ad wasn't canceled in that time period, a $35.95 monthly fee would be crammed onto the company's bill, Madigan says. When businesses attempted to cancel, however, they were unable to due to an almost continually busy line, Madigan says.
"This company operated under a guise of free Yellow Page listings, but in reality was deceiving unsuspecting businesses," Madigan said.
"When business owners attempted to stop the additional charges and cancel the service, they found they couldn't get through to company representatives."
Under terms of the agreement, the company is required to stop soliciting any new Illinois consumers for Internet Yellow Page listings and must not bill any new customers.
The court also ordered the company to pay $10,000 and any remaining consumer refunds. Furthermore, Live Deal must also better inform consumers of its sales process for all products it tries to sell.