Comment by acangiano | Hacker News Reader

Comment by acangiano | Hacker News Reader

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IANAL, but you can check Exibit A at the end of the document embedded in this blog post: http://avramc.posterous.com/united-directories-federal-court...

Facts:

- They clearly state that it's not a bill/invoice.

- The fine print explains that there is no obligation to subscribe.

- The fine print explains that they are not affiliated with the actual Yellow Pages.

- The fine print font is larger than your typical bank statement fine print.

- The typical Yellow Pages logo is prominently featured in the solicitation. This is probably not illegal, but can be seen as potentially misleading.

- The first line of the return card is addressed to YELLOW PAGES (as opposed to Yellow Pages United). Probably not illegal, but again, potentially misleading.

Opinion:

I think they (United Directories, not Hashrocket) adopted an unpleasant business model that I wouldn't want to be associated with. But considering Exibit A, it appears that as far as the solicitation goes, they may be operating within the borders of legality. It will be interesting to see what the court will decide.

If it is within the borders, it's just so, not by much. Also, legalities aside, this is unethical business behaviour and I wouldn't want to be associated with it in any shape or form.

But, hey, maybe there's no such thing as bad publicity.

I think in this case, there is such thing as bad publicity. And as much as it may be unfair, I'd be surprised if this story didn't affect Hashrocket as well (which is not guilty of any wrongdoing).

This kind of deceptive business is quite common, and they usually get away with it. It would be naive to think that the Feds have the resources to go after every company that engages in deceptive marketing. There is something more here. They have taken the trouble to get access to bank accounts, this is no minor step. I think they saw enough in those accounts to warrant going after this. While there may well have been a sweep account involved, the document seems to clearly imply that they looked at the pattern of individual deposits coming in from the "customers." To say that this is some overzealous prosecutor desperate for fame seems a bit hasty.

Consider that they pulled records of how many business reply cards came into the PO box and compared that to how many names were actually published in the book. They compared that to the bank accounts. While I have my doubts that the actual solicitation was illegal and that the total dollar amounts were so high, there seems to be more here than just an out of control prosecutor.

If United billed far more names than they actually published in the book, that would be fraud.

My analysis was in fact limited to the legality of the solicitation. I'm in no way qualified to figure out the legality of their operations in general.

After reading the complaint, I think its pretty clear the reason the Feds thought it warranted this much investigation:

"In November 2009, two victims from the Charles Smith/YPDP fraud scheme contacted the United States Attorney's Office in the Northern District of Georgia, indicating that they were still receiving fraudulent Yellow Pages solicitations..."

When they investigated and realized that the solicitation came from a company owned by Charles Smith's brother, I'm sure that was enough to launch a full fledged investigation.

What's the deal with Mark Smith's brother Charles?

"In September 2009, a Grand Jury sitting in the Northern District of Georgia indicted Charles Smith for committing mail fraud. He remains a fugitive."

Mark's brother Charles has been estranged from the family for 20 years or more. I have known the family which is very close knit and court was the first time I ever heard of the existence of Charles.

The way you phrase this, it seems more of a trade mark violation than anything else.

Just to clarify per what was presented by both the prosecution and the defense in the case the walking fingers logo and yellow pages name are public domain. The various local phone companies engaged in the exact same business model have no more claim to them than anyone else. The only difference being that most of them were given the advantage of government subsidies and a bureaucratic pseudo monopoly blessing.

True, although I'm betting the local phone companies' distribution model more accurately fits the traditional definition of "the Yellow Pages". When people think "Yellow Pages" they think of a free telephone directory distributed to all residences and businesses in the area being advertised in.

According to the complaint, United Directories published 27,626 copies of the book in 2009. Exhibit A of the complaint is an advertisement they sent to a small business in North Las Vegas for the "National Business Edition" of the "Yellow Pages". I don't see how, with 27,626 copies printed, the United Directories' Yellow Pages could possibly meet the traditional definition of "the Yellow Pages" in a "National Business Edition".

So yes, while probably not illegal, its deceptive to use the term "Yellow Pages" when you're just publishing a lower circulation business to business directory.

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