Directory service company Trudon has little recourse against Directory Solutions, which purports to offer businesses a value-added service for Trudon's directories, without really doing anything.
Directory Solutions has set itself up as a competitor to Trudon, which publishes the white and yellow pages on behalf of Telkom. The Port Elizabeth-based company sends out unsolicited faxes to businesses in the telephone directory, purporting to offer an advisory service.
However, Directory Solutions has nothing to do with Telkom's 64.9% subsidiary, Trudon, and is not officially acting on the company's behalf. It also does nothing more than send consumers a proof of an advertisement, which the business has to send to Trudon anyway.
Despite this, consumers are falling for the “service” and paying up to four times as much as they would by going directly to Trudon.
The fax, a copy of which is in ITWeb's possession, is addressed to a business and states: “Attached please find a proof of your Telkom telephone directory entries. These details are taken from our database at Directory Solutions CC and are for the 2011/12 edition of the directory.”
Directory Solutions does vaguely distance itself from Telkom and Trudon with the disclaimer: “We are not responsible for the publishing, printing or billing of your entries, and are not associated with those companies in any way.”
Pay twice
Consumers who sign up for Directory Solutions' services not only have to pay the Port Elizabeth-based company, but also have to pay Trudon for the entries, after sending the entries to Trudon for publication themselves.
Trudon CFO Johan Myburgh says Directory Solutions sends out unsolicited faxes to businesses listed in the telephone books. He adds that the Port Elizabeth company charges more for its services than Trudon.
Directory Solutions' once-off fee for submitting an entry to Trudon is in the vicinity of R1 650, while Trudon's fee for publishing an enhanced listing is typically in the vicinity of R300 a year.
However, despite Directory Solutions' disclaimer that it is not affiliated with Trudon, many customers assume Directory Solutions is a legitimate Trudon agent, and pay up only to find Trudon still needs to be paid for the advertisement.
Myburgh says Directory Solutions is not actually competing with Trudon, as it does not have its own directory service. Trudon provides the directory service to fulfil Telkom's licensing mandate.
He says there is little Trudon can do to stop Directory Solutions, as it is not breaking the law. However, the Port Elizabeth-based company is charging customers for doing nothing, he claims.
Without carefully going through the fax, which is presented as an invoice that is due and payable, consumers will not realise they are not dealing with Trudon. “The fax makes it sound like they are acting on our behalf. The customer thinks they are dealing with us,” says Myburgh.
Legal battle
Adams and Adams partner G'erard du Plessis, who acts on behalf of Trudon, says what Directory Solutions - or one of its several other aliases - is doing is legal.
He says Directory Solutions' business model is based on consumer confusion. “It's amazing how easily consumers can be confused.”
Despite Directory Solutions' allegedly value-less offering, the company has tried several times to force Trudon to publish its submissions, and Trudon has fought back to stop the company from soliciting business from its clients.
The legal battle has now gone through four court cases, two unsuccessful complaints by Directory Solutions to the Independent Communications Authority of SA, and is now at the competition authorities.
In 2003, Telkom waged a legal battle on what was then TDS's behalf. The court's decision was that Directory Solutions cannot interfere with Trudon's contractual relationship with its customers, explains Du Plessis.
To circumvent the ruling, Directory Solutions changed its 'service' offering and started approaching businesses for entries in the phone book over a year in advance.
Most recently, Directory Solutions took Trudon to the Competition Tribunal to force it to publish its submissions without upfront payment. Trudon appealed the decision, which was in Directory Solutions' favour, winning with costs.
Du Plessis says this makes it difficult to enforce the ruling, as Directory Solutions gets to these people before Trudon has a chance to sign them up. However, Trudon is looking at the situation to determine how it can force Directory Solutions to stop soliciting entries for the phonebook, he says.
Astonishing
Arthur Goldstuck, MD of World Wide Worx, says Directory Solutions has identified an apparent gap in the market, and presented itself as an apparent middleman between Trudon and the customer.
He comments that it is astonishing the company is being viewed as a competitor, when it is piggybacking on Trudon's business.
In addition, consumers need to carefully read the fax to realise they are not actually being billed. “A lot of people have been taken in by far less subtle payment requirements,” says Goldstuck.
Directory Solutions could not be reached for comment this morning. The telephone number provided on the fax does not connect, and is the same number listed in the yellow pages. The company also does not have a Web site.
To view the fax, click here.
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