RALEIGH, N.C. — When small businesses received checks from online business directory company Directory Billing, a deposit triggered a contract.
Directory Billing, also known as USDirectory.com sent the checks, in amounts averaging less than $5, to get businesses to sign for listings in their online yellow pages. Those who cashed the checks were automatically enrolled in the company's monthly service -- at a cost of $30-$50 per month.
The North Carolina Attorney General's office found that the practice was deceptive, and that the small disclosure on the back of the checks was often overlooked.
On Monday, the state settled with the company, which agreed to discontinue the check program and to pay $400,000 to the state. Directory Billing must also send letters to all current customers giving them the opportunity to cancel the service and receive a partial refund for previous charges.