The Federal Trade Commission obtained a court order to freeze the assets of Datatech Communications, a Quebec-based company alleged to have used telemarketing to trick U.S. small businesses into buying business directory listings, the FTC said yesterday.
According to the complaint, Datatech callers failed to disclose their identity or falsely claimed to be affiliated with the Yellow Pages or a local telephone company. The callers also falsely claimed that the call's purpose was to renew a directory listing, when the business had never been listed, the FTC said.
Datatech charged businesses $295.95 for a listing in its directory and a copy of the AT&T National Business Buyers Guide plus shipping and handling, the FTC said. In many cases, Datatech billed businesses even if they refused the offer, according to the complaint.
When businesses refused the offer, Datatech callers assured them that they could cancel the listing without financial obligation, the FTC said. But those who tried to cancel learned that they must pay a cancellation fee ranging from $49 to $159, according to the FTC.
If businesses refused to pay, Datatech referred their accounts to collection agencies and threatened to damage their credit, the FTC said. A federal judge in U.S. District Court in Chicago issued a temporary restraining order and asset freeze against the company Sept. 8.