ONLINE ADVERTISING COMPANY TO PAY $142,500 AND VICTIM RESTITUTION FOR DEFRAUDING CONSUMERS IN SOLICITATION CHECK SCHEME
SANTA ANA – The Orange County District Attorney (OCDA) obtained a settlement Wednesday, July 29, 2009, against an online advertising company, On-Line Yellow Pages, Inc. (OLYPI), ordering them to pay $142,500 for defrauding consumers in a “solicitation check” scheme. OLYPI is also required to pay restitution to any consumer with a legitimate refund request.
In October 2008, the OCDA began investigating OLYPI after receiving several Orange County consumer complaints and corroborating information from Alaska’s Attorney General Office (AAG) that the Orange County based business was engaging in misleading and unfair business practices in a “solicitation check” scheme. A “solicitation check” scheme is where customers are mailed checks for small amounts and mislead into thinking the check is simply a rebate from a company they already did business with. If the nominal check is cashed or deposited, however, the endorser or payee identified on the check is obligated to pay for the goods or services, as indicated in fine print on the back of the check.
OLYPI mailed checks amounting to approximately $3.50 to businesses, schools, and non-profit organizations throughout the country marked “rebate enclosed.” When a consumer cashed the check, OLYPI billed them $29.95 each month for “advertising.” OLYPI would automatically add the monthly charge to the consumer’s phone bill or withdraw the amount from the consumer’s bank account after the check was cashed.
As part of the settlement, OLYPI will pay $142,500 in civil penalties. The order prohibits OLYPI from sending any type of “solicitation checks” to any state in the country from Orange County. OLYPI must also mail a letter offering a 2-month refund for services charged to every consumer that received and cashed a solicitation check and paid for services for which they did not intend to sign up. They are required to pay restitution to consumers who return the form enclosed in OLYPI’s letter or file complaints directly to the OCDA within 60 days of the signed judgment between July 29, 2009, and September 27, 2009.
OLYPI had been previously investigated for a similar scheme by the Oregon Attorney General’s Office (OAG) and reached a settlement with OAG. The OCDA and AAG jointly investigated and concurrently filed injunctions against OLYPI in Orange County and Alaska. Of the $142,500 settlement, $30,000 will go to AAGO to cover civil penalties and costs of the investigation.
