Corrections or additions?
This article by Kathleen McGinn Spring was prepared for the March
12, 2003 edition of U.S. 1 Newspaper. All rights reserved.
Beware Those Directory Deals
Eric Berkowsky recently called U.S. 1 Newspaper to
find out whether a representative had called to solicit a directory
listing of his company for $360. At first, recalling that his
information had appeared in the paper’s business directory in past
years, he thought the call was legitimate.
dollars sounded about right for an ad," he says. "It sounded
like it was repeating what we did last year."
Then he received another call, reminding him that an invoice for $360
would be on the way, and he became suspicious. He called the
department of his 20-person architectural, planning, and construction
company, Berkowsky and Associates Inc. at 2551 Route 130 South in
Cranbury and found out that no such check had been issued last year.
(U.S. 1’s records indicate that the Berkowsky firm has never purchased
any ad in any U.S. 1 publication.)
The individuals who contacted Berkowsky gave as their names Fabian,
a woman, and Adam. But, while U.S. 1 is verifying company information
for its annual directory, it does not charge for the listings, and
it does not have a Fabian or an Adam on staff.
Berkowsky is the second person who has contacted the newspaper seeking
information about what appears to be a directory scam. Craig Villas
of ETD Discount Tire on Route 1 North was also contacted and he also
thought at first that the caller was from U.S. 1. He was asked for
Meanwhile, U.S. 1 Newspaper itself nearly fell for a slightly
directory scam. The paper received a check for $3.17 from
— an unusually small amount but not unheard of in the paper’s
classified ad department, which almost stamped it for deposit. A
form letter in the same envelope said that "the enclosed bank
check is real, so be sure to cash it right away! It’s
dramatic way of celebrating and alerting companies, like yours, that
this yellow page data is currently receiving a tremendous amount of
page views every day."
The letter continues in the same vein, in tiny print, for another
four paragraphs before it asks "Can your company afford to allow
the competition to gain an advantage when it costs only $17.95 per
month if you respond now?" Yes, signing the check triggers a
monthly charge. Nine paragraphs further, and on the back, it is
that charge will not turn up as a monthly bill, but rather will be
included in a phone bill. One or two or three months hence, who would
connect the $3.17 check with the charge?
Yellow-Page.Net’s letter included — front and center — the
seal of the Yellow pages I.M.A., the Berkeley Heights-based trade
organization for Yellow Page directories. Christopher Bacey, director
of communications for the group, asked for comment about the $3.17
check, says "We’re aware of the situation, but misleading bills
are not illegal."
The use of the name "Yellow Pages" on a directory is not
either. "`Yellow Pages’ was never trademarked," says Bacey.
Yellow-Page.Net does publish a directory, on the Internet at
It does not appear to be of much help in researching businesses since
names appear in no alphabetical or geographical order. Still,
customers" can link to their websites, and each gets a listing
with a map to its offices.
"It’s a directory," says Bacey, who worked for the Associated
Press before going into corporate communications. "It is a real
business. It has sales of $5 million."
DeVal Johnson is a founder of the business. A graphic designer who
had been designing phone books, he moved into web design and saw
on the ‘Net. He and a friend founded Yellow-Page.Net, which has its
offices in Mesa, Arizona. A publicly-traded company (OTCBB: YPNP),
it has 750 shareholders and is now trading for just about a nickel
The company is now sending out 1 million of its checks every month.
Johnson says response rate is about 2 percent. "We get one or
two complaints a month," he cheerfully admits.
Customers are billed — on their phone bills — by
a subsidiary of Yellow-Page.Net. Johnson says a customer who doesn’t
wake up to the charge right away, even 12 months down the road, can
receive a refund.
Yellow Page.Net’s most recent 10Q filing with the SEC
reveals that the company does indeed have sales of $5 million. The
filing states that "We currently derive almost all of our revenue
from selling Preferred Listing." As of September 30, 2002, the
company had sold such listings to 106,439 companies. This, it tells
the SEC, is less than six-tenths of 1 percent of the country’s
The company’s 10 Q adds that it has pulled in these customers through
a direct mail solicitation, which "includes a promotional
(ie. generally a $3.50 check), which if cashed by the business
signs the business up for the Preferred Listing service for an initial
12 automatic renewals."
The filing says that the company mails a written confirmation card
to new customers, "generally" within days of activation. This
is true, says Johnson, who says a postcard goes out in about a month.
Johnson denies that his company is operating a scam. But the Yellow
Pages trade group has received a number of complaints against
Bacey, its spokesman, supplied a letter from John Greco, the
CEO, to Robert Lendino, vice president national sales operation of
Yellow Pages Media. "Thank you for your recent letter expressing
concern over a marketing solicitation used by Yellow-Page.Net,"
he writes. "As you know, the Yellow Pages I.M.A. continues to
engage in a public awareness campaign to prevent the proliferation
of `bogus’ yellow pages invoice schemes that not only cost advertisers
huge sums annually, but also shed a negative light on the legitimate
Yellow Pages industry.
"Our efforts target those scams that deceive advertisers into
thinking they are renewing their regular Yellow Pages ad, when in
reality they are receiving a new solicitation," Greco continues.
"We are also targeting those scams that charge an advertiser for
placement in a directory that does not exist or is so narrowly
that it provides no benefit."
But, writes Greco, "the marketing approach used by Yellow-Page.Net
abides by all required advertising regulations and disclosures. That
being said, some confusion has been created among a few Yellow Pages
Indeed. Yellow-Page.Net has told Greco that it will refund money to
unhappy customers. The problem in great part, though, is recognizing
that a purchase has even been made.
The same situation exists in another solicitation that arrived at
U.S. 1 Newspaper’s offices at about the same time as the
"gift check." This one was from Yellow Pages, Inc. Cleverly,
it contains one neon yellow rectangle right up near the top. Inside
is a date, April 9, 2003 to be exact. The eye is drawn right to it,
and then downward to a second — much larger — neon yellow
box. Following the yellow, one’s eye misses the type above it, type
that reads "This is not a bill" and the type that reads
are not your local phone company."
The piece of paper sure looks like a bill. It itemizes charges and
presents a "total amount" of $296. Farther down — in red
— it states "Please make check payable to Yellow Pages,
It would not be difficult for a busy bookkeeper — his eye drawn
to the yellow bottom line — to send off a check. Yes, above the
yellow, it does say "This is a solicitation for the order of goods
or services, or both, and not a bill." And Yellow Pages Inc. does
have what appears to be a useful Internet directory
A quick spin on Google for "Yellow Pages" returned 3,400,000
sites. Among them are The Ultimate Yellow Pages, At Hand Network
Pages, Superpages.com:Yellow Pages, Yellow Pages Online, and
Internet Yellow Pages — and their equivalents in any number of
There is obviously gold in that thar’ yellow. And Yellow-Page.Net
has revenues of $5 million from fewer than 1 percent of the country’s
businesses. Think of the possibilities! Meanwhile if someone named
Fabian or Adam should call about a directory, call the police before
you call U.S. 1.
— Kathleen McGinn Spring
Corrections or additions?
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— the web site for U.S. 1 Newspaper in Princeton, New Jersey.