Attorney General Danberg Announces Settlement with Yellow Pages

Attorney General Carl C. Danberg announced today that YP Corp., (doing business as YP.com) and its wholly owned subsidiary Telco Billing, Inc., have agreed to settle allegations that they engaged in deceptive business practices by using “live” activation checks to obligate businesses and organizations to pay for an enhanced listing (called an “Internet Advertising Package”) on YP.com’s online yellow pages directory. The agreement is the result of an investigation by Delaware and 33 other states regarding YP.com’s use of activation checks.

According to the terms of the settlement, YP Corp. has agreed to stop using activation checks as the sole device to obligate businesses to purchase its products and services. YP Corp. also has agreed to pay $2,000,000.00 collectively, to the investigating states. YP Corp. further agreed to contact its current activation check customers to inform them of their right to cancel their agreement with YP Com and of their potential eligibility for at least a partial refund of monies paid to YP.com

The states alleged that since at least January 1, 2003 YP.xom sent businesses and other organizations “live” activation checks in the mail. These checks were made payable to the business or organization for a small amount, usually around $3.50. Ont he back of the checks, in fine print above the endorsement line, was language stating that by depositing the check, the recipiend agreed to purchase advertising from YP.com for its online yellow pages directory. The fine print also stated that by depositing the check, the recipient authorized YP.com (through it subsidiary Telco Billing, Inc.) to bill the monthly fees in advance, on the business’s telephone bill or by debiting the amount from the bank account into which the recipient deposted the check, or by other methods. The envelope that the check was mailed in also contained YP.com advertising material.

The states’ investigation revealed that some activation check recipients that deposted YP.com’s checks did so without knowing that the deposit constituted a purchase of an enhanced online yellow page listing from YP.com and that the deposit authorized YP.com to bill them monthly fees on their telephone bill, by debit from their account, or any other method. In some of these cases, the recipient remained unaware that it was being billed by YP.com after it deposited the activation check.

The allegations that gave rise to the state’ investigation and the settlement described above have not been admitted by YP.com, and its agreement to address the STate’s concerns and allegations does not constitute an admission of wrongdoing by YP.corp, Yp.com, or Telco Billing, Inc.

Current YP.com customers who are being billed through their telephone bill or bank account for a listing and became a customer by depositing an activation check should be contacted by letter within the next two (2) weeks by YP.com. Any customers with questions are invited to call the Attorney General’s Office at 577-8600.

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Identity Theft Passports Available October 28

Danberg announced today that Delaware’s Identity Theft Passport Act will go into effect on October 28, 2006. This new law was designed to provide victims of identity theft a way to substantiate a claim of identity theft to creditors and law enforcement.

ID theft occurs when a criminal steals a person’s confidential information such as Social Security Number, birth date, credit card numbers and bank account information. Criminals use stolen information to obtain false drivers’ licenses, utility services, credit cards, loans, government benefits and merchandise. Stolen identities are also used to defraud consumers, commit crimes and avoid arrest.

Now, victims of identity theft have a new way to fight back and reclaim their identity. To be eligible for a passport, victims must file a report witht he police agancy with jurisdiction over their residence. At the same time, they can apply for the passport through the police agancy or they can apply through the Attorney General’s Consumer Protection Unit.

Passports can be presented to a law enforcement agency to help prevent arrest or detention for an offense commited by another, to creditors to aid in the investigation of fraudulent charges, and to a consumer reporting agency as official notice of a dispute.

Consumers can obtain more information about the new law and tips on how to protect themselves from identity theft by calling Attorney General Danberg’s Consumer Protection Unit at 800-220-5424 or on his website at www.state.de.us/attgen


Medicaid Fraud Control Unit Announces Health Care Fraud Plea of Sachin J. Karnik

(Wlmington, DE) The Attorney General’s Medicaid Fraud Control Unit
announced that Sachin J. Karnik, 35, owner and operator of Comprehensive Counseling
Services, 1601 Milltown Road, Wilmington, pled guilty to one count of felony Health
Care Fraud in New Castle County Superior Court on October 17, 2006. Superior Court
Judge Fred S. Silverman sentenced Karnik to four years of probation and ordered him
to make restitution in the amount of $63,040.73 to Delaware Physicians Care
Incorporated and $2,500.00 to the Delaware Medicaid Fraud Control Unit. Karnik, a
licensed clinical social worker, admitted that, between November 1, 2005 and May 31,
2006, he engaged in a pattern of presenting fraudulent health care claims to Delaware
Physicians Care, Inc., a managed care organization for Delaware Medicaid, by
presenting false statements in support of claims for payment.
Karnik’s fraudulent scheme involved obtaining additional family information from
his patients and falsely billing for counseling services not provided to the other family
members. He also obtained additional names of Medicaid recipients and billed for
counseling services not rendered.
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WARNING: SENIORS TARGETED FOR MEDICARE FRAUD

(Wilmington, DE): Attorney General Carl C. Danberg warns senior citizens that they may
be targeted by criminals engaged in a new telephone fraud scheme. Telephone callers pretending
to be government representatives phone senior citizens and talk to them about their concerns with
changes in the Medicare program. Since the callers have their names and addresses, some
seniors believe that the call is legitimate. These calls are never legitimate – a criminal is always on
the other end of the line.
Callers lie to seniors and tell them that they owe more money for Medicare coverage. The
callers then ask for personal banking information including the name of the bank, routing
numbers, and account numbers. Never give personal banking information to anyone on the
phone.
Attorney General Danberg offers the following tips to avoid becoming a victim:
 Do not assume that someone who knows you name, address, and phone number has a
legitimate reason for calling.
 Be suspicious of any caller who is asking for private financial information.
 Never tell a caller about your bank account numbers.
 Hang up the phone if you feel uncomfortable about the call.
 If you have questions about Medicare coverage, call 1-800-MEDICARE or go to
www.medicare.gov for more information.
Victims of senior citizen fraud should call Gary Tabor, Special Investigator in the Office of
the Attorney General, at (302) 577-8508.
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Yellow Pages, Inc. agrees to halt deceptive trade practices

(Wilmington, DE): Attorney General Carl C. Danberg has joined with twenty-six other states in reaching a settlement agreement with Yellow Pages, Inc, Electronic Directories Company, LLC and John Wurth to stop their deceptive practices in connection with the use of check solicitations and renewal notices. The States investigated complaints that Yellow Pages, doing business as YellowPagesInc.com, sent solicitations to consumers in the form of a check described as an instant cash back offer but did not adequately disclose that by cashing the check, consumers were contracting for services. Yellow Pages then engaged in aggressive collection efforts against consumers that cashed the checks which resulted in many consumers paying for services they never intended to order.

As a result of the settlement, Yellow Pages will permanently cease all collection efforts arising out of the check solicitation program and will refrain from using solicitations in the form of checks obligating consumer to pay for goods or services if the check is deposited or cashed. Contracts for consumers who cashed checks but did not pay for any services are deemed canceled and consumers will not be billed. In Delaware, 311 companies and non-profit organizations will have their contracts cancelled and will not receive additional billings.

In addition, Yellow Pages will refund payments made by consumers who paid for services they did not want after receiving collection notices. , or any third party collect In Delaware, 146 companies and non-profits may be entitled to refunds averaging $179. If you believe that your company or non-profit organization may be entitled to a refund, please call the Attorney Generals Consumer Protection Unit at 800-220-5424 or 302-577-8600 for more information on how to file a complaint. Only complaints received by June 16 can be considered for a refund, so please call as soon as possible.

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