SOURCE: YP Corp.

December 15, 2006 08:00 ET

YP Announces Successful Resolution to Attorney General Inquiries

MESA, AZ -- (MARKET WIRE) -- December 15, 2006 -- YP Corp. (OTCBB: YPNT), a leading provider of national Internet Yellow Pages and parent company of YP.com, today announced the successful resolution to the inquiries of several states' attorney generals into check mailers that have been referred to in our public filings. "Putting behind us the marketing methods of the previous management allows us to continue to build a formidable online Yellow Page company," said Dan Coury, Sr. CEO of YP Corp. "This has been a proactive process on our part and we are pleased with the resolution."

Although check mailers have been unpopular with certain states, our check mailer wording has complied with FTC requirements since 2001. Check mailers have been a common marketing tool for direct mail used by such companies as AT&T and Chase Bank. However, this inquiry by the attorney generals of 34 states has consumed valuable company resources and management's time. The additional time, money and resources that would have been expended would have been significant for a company of our size. We believed our stockholders were better served by retiring the marketing methods of the previous management and putting an end to the monetary drain that would have otherwise ensued fighting the states.

Under the terms of the settlement with the 34 states, YP Corp. agreed to the following:

--  Payment of a settlement fee of $2 million to the state consortium,
    which they may distribute among themselves;
--  Discontinue the use of activation checks as a promotional incentive;
    and
--  Notify the check mailer acquired customers of their legal rights to
    cancel the service and providing them an opportunity to receive a
    refund equivalent to the customer's last two payments.
The effectiveness of the check mailer has been on a steady decline over the past few years; consequently, the number of leads generated from check mailers has become a smaller part of our sales efforts. While these check mailers were marketed only to businesses and not to consumers, YP Corp. voluntarily discontinued the practice of check activator as a marketing tool.

YP Corp.'s Chief Operating Officer, John Raven, explained, "One of the main reasons our check complied with FTC rules was that it stated terms and conditions that specify an obligation to the services. Now we reinforce several confirmation points during the sign-up process, which includes contact by telephone and in writing well in advance of any collection of payment. It is now our practice to contact the customers at multiple points in writing and by telephone, who responded to our check mailer, so that we could collect a description of the business and confirm that the customer ordered the service."

If a business decides to not subscribe to the service, the business had the option to cancel at any time. Furthermore, YP Corp.'s policy is to offer a full refund during the first 120-days of service. The purpose of this risk-free trial period is to ensure customer satisfaction and to demonstrate the effectiveness of the services.

We analyze sales campaign performance data on a regular basis and we began to investigate the effectiveness and profitability of this technique in 2005 and have concluded that we should focus on more effective and less costly methods to acquire customers. The effectiveness of the check mailer has been on a steady decline over past few years; consequently, the number of leads generated from check mailers has become a smaller part of our sales efforts.

Our continual refinement of customer acquisition should increase customers, customer retention and profitability in the future. All of our markets remain completely open for all other marketing methods.

About YP Corp.

YP Corp. is America's Local Online Yellow Pages™ and offers businesses a simple and affordable way of creating a web presence and marketing their products and services to local audiences online. The Company offers an Internet Advertising Package which provides advertisers preferred placement in yellow page search results and their own Mini Webpage™ where they can provide potential customers with details about their products and services.

Forward-Looking Disclaimer

This press release may include statements that constitute "forward-looking statements," which are often characterized by the terms "may," "believes," "projects," "expects," or "anticipates," and do not reflect historical facts. Forward-looking statements involve risks, uncertainties and other factors that may cause actual results, performance or achievements of YP Corp. and its subsidiary to be materially different from those expressed or implied by such forward-looking statements. Specific forward-looking statements contained in this press release include, but are not limited to, the Company's anticipation that (i) it will be able to build a formidable online Yellow Page company; (ii) its continual refinement of customer acquisition should increase customers, customer retention and profitability in the future; and (iii) the company's markets remain completely open for all other marketing methods.

Factors that may affect forward-looking statements and the Company's business generally include but are not limited to (i) the risk factors and cautionary statements made in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2005; and (ii) other factors that YP Corp. is currently unable to identify or quantify, but may exist in the future.

Forward-looking statements speak only as of the date the statement was made. YP Corp. does not undertake and specifically declines any obligation to update any forward-looking statements. This press release includes statements that constitute "forward-looking statements," which are often characterized by the terms "may," "believes," "projects," "expects," or "anticipates," and do not reflect historical facts. Forward-looking statements involve risks, uncertainties, and other factors that may cause actual results, performance, or achievements of YP Corp. and its subsidiary to be materially different from those expressed or implied by such forward-looking statements.

Contact Information

  • Contact Information

    Roger Bedier
    YP Corp.
    Investor Relations
    Ph: 480-325-4339
    Fax: 480-325-1257