Illinois Charges Pay-Per-Call Scheme Defrauds Job Seekers

July 21, 2004
A New York City company is accused of scamming job seekers by placing employment ads that list a $29.95-per-call number.

Illinois Attorney General Lisa Madigan filed charges against Clear Three Corp., which allegedly scammed Chicagoans out of $260,000 to hear information they could have gotten for free or for the cost of a long-distance call.

The alleges Clear Three Corp.'s ads lured job seekers to call a number for information about federal jobs in Chicago. While the ad includes the words "$19.95 flat rate," callers actually are charged $29.95.

"When consumers search for a job, they shouldn't have to worry about a black hole of fraud in the middle of the help wanted pages," Madigan said. "Clear Three Corp. preyed on the vulnerability of the unemployed and rang up profits using a deceptive pay-per-call scheme."

Clear Three allegedly placed deceptive advertisements in the Chicago Sun-Times and other local newspapers since at least January 2003. In just 15 months, between January 2003 and March 2004, the company collected $259,000 in gross revenue on calls placed to the pay-per-call number listed in its advertisements. The advertisements proclaimed:

"FEDERAL JOBS - CHGO.
Now Hiring in the CHGO. area.
No expr. To $59K. $19.95 flat rate
Medical, Vacation, Pension.
312-976-4646. 24 hrs./Seven Days."

When consumers called the number listed they were charged $29.95 for the call.

Callers to Clear Three's pay-per-call phone line allegedly heard a short, one-minute message providing basic information about a federal government job hotline and Web site. According to Madigan's complaint, this information could easily be obtained by a consumer for free.

Madigan's suit alleges Clear Three and Canio Carl Saluzzi, the company's board chairman, engaged in unfair and deceptive practices in violation of Illinois' Consumer Fraud Act. It notes that the company is not authorized to transact business in Illinois,

Madigan's suit also maintains that the defendants violated Illinois' Pay-Per-Call Act by charging a fee significantly higher than the $19.95 flat rate mentioned in the advertisement. Also in violation of the Act, Clear Three failed to provide disclosure information at the beginning of the call to inform consumers of the cost of the call and callers were not given the opportunity to disconnect before the charges were incurred. Consumers did not learn of the charges until they received their next telephone bill.

Madigan said Clear Three also violated the Illinois Job Referral Act when it accepted money for job referral services without providing consumers with sufficient information in the advertisements or the legally-required written contract.

Madigan's suit seeks to prohibit Saluzzi and Clear Three from conducting further business in violation of Illinois law. The lawsuit also seeks restitution for the victims and civil penalties of $50,000 for each violation of Illinois law.

The lawsuit also names SBC Illinois as a nominal defendant. The lawsuit does not allege that SBC Illinois had any knowledge of the misrepresentations and illegal activities perpetrated by Clear Three. Madigan said SBC Illinois has been included as a nominal defendant to grant her office the power to request that the telephone company disconnect Clear Three's pay-per-call line.

In 2002, the City of Chicago requested that SBC Illinois disconnect a number used by Saluzzi in a similar scheme promoting "city jobs." In addition, the New York Attorney General filed a similar lawsuit against Saluzzi in February 2004. The defendant settled that case.

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