Investigation: Alleged Phone Book Advertising Fraud
The Eye Team investigates an alleged fraud involving advertising discrepancies with local phone book.
Original Article Posted June 18, 2010
Ads in the well-known RAM phone book can sell for thousands of dollars with the promise that the book will be given to homeowners and businesses in nearly 20 south central communities.
The Eye Team investigates an alleged fraud case involving the local phone book where thousands of dollars may have been lost in a deal that some say doesn't add up.
The problem is that the number of books promised and the number actually distributed don't add up.
Steve Phillips' company, Flawless Distribution, was hired to deliver the regional Anchorage and Mat-Su Valley phone book, known as RAM.
He says the publishing company, PDC Pages, printed far fewer phone books than promised to their advertisers, but still charged them the full price for the ads.
Advertisers were promised 100 percent coverage in areas, including the Mat-Su Valley, where many areas were skipped altogether. In other areas, only businesses along the main corridors received books.
"Big Lake, Houston, Talkeetna- they're all in the coverage area of the directory and they got zero books," said Phillips.
Emails and delivery plans between Phillips and the publishing company show over the course of four days, the number of printed books went from 123,000 to 102,550.
"The estimates I got on how many books were needed for this job was 182,000 plus. We received around 103,000 books, roughly 40 percent fewer than needed," said Phillips.
Though the number of printed books was significantly cut, the publisher did not notify their advertisers, still under the impression their ads would be seen by all residents in all communities as promised.
In addition to filing this consumer complaint with the Alaska attorney general, Phillips is going from advertiser to advertiser to explain what happened.
"The publisher severely under printed the books," said Phillips.
Some businesses are just learning of the alleged fraud-"If they're overselling and under delivering, there's definitely an issue there," said Marc Magnus, owner of Quality Midtown Auto Body.
But Debbie Ryan, the business manager at Community Chiropractic Clinic says she first became suspicious about the phone book's distribution when neither she nor any of her employees received books at their homes.
"First, I couldn't get a hold of them. I left several messages and then when I did talk to the supervisor or someone who had authority, they reduced our bill by a month's payment, which is right around $500," said Ryan.
"She gave me the coverage areas that it would cover," said Ryan, with the promise that books would be in all of those communities in every household.
The Eye Team attempted to contact the phone book's publisher at the Anchorage office and declined to comment on the case.
The national company that owns the RAM publisher, HM Capital, also prints phone books in 17 other states.
Right now, Steve Phillips is on his way to those other states because he suspects the alleged fraud is happening in there too.
The attorney general is now in the process of reviewing and investigating the consumer claim.