Two companies that harassed SMEs to pay fake invoices for advertisements in the Yellow Pages have been fined $2.7 million by the Federal Court after action was brought by the Australian Competition and Consumer Commission.
Yellow Page Marketing BV (YPM) and Yellow Publishing Limited (YPL) sent thousands of invoices to business owners in Australia demanding payment for what victims thought were advertisements in the Yellow Pages directory and website operated by Telstra subsidiary Sensis.
The invoices, which had the words “Yellow Pages” and the directory’s famous “walking fingers” logo featured prominently, were accompanied by a campaign of harassment by the two companies, with victims threatened with late fees if they did not pay up on time.
Australian Competition and Consumer Commission chairman Graeme Samuel said the $2.7 million penalty levelled against YPM and YPL is the largest since civil pecuniary penalties were introduced as part of the Australian Consumer Law, which has replaced the Trade Practices Act as the key piece of legislation the ACCC works under.
“These proceedings are a warning to companies both here and overseas that the ACCC will not tolerate this type of conduct and will seek substantial penalties,” Samuel said in a statement.
But imposing a big penalty and getting the companies involved to comply will not be easy.
Given YPM and YPL are based overseas, the ACCC concedes that it is “unlikely that any real assets can be tracked down”.
Under the Federal Court’s orders, all contracts with Australian businesses and the two overseas companies have been declared void, which means any SMEs paying the scammers can stop doing so immediately.
In addition, the ACCC plans to return cheques subpoenaed from the Commissioner of Police of Western Australia to the businesses that issued them.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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