• by Wendy Davis  @wendyndavis, January 2, 2014

Yahoo has been hit with a potential class-action lawsuit alleging that its new lead-generation platform, Localworks, doesn't deliver on its promises.

Wilson & Haubert, a law firm based in North Little Rock, Ark., alleges in a complaint filed in federal court that it paid Yahoo $90 for a three-month enrollment in Localworks. Wison & Haubert says it did so in November, after a free scan by Localworks uncovered more than 120 errors in listings by various online directories. “Relying on the representations made by defendant -- namely, that purchasing the services offered by Localworks would 'fix everything' -- plaintiff enrolled in Localworks,” the law firm alleges.

Wilson & Haubert says in its lawsuit that subsequent scans by Localworks reveal that the directory errors remained unchanged. “Despite defendants' representations that the errors it identified had been corrected, and that plaintiff's business information was now included on the 40+ sites, enrollment in Localworks did not provide such benefits,” the law firm alleges.

The law firm says that as of late last month, when it filed suit in the Northern District of California, the scan showed more than 87 errors in the company's listings on directories. The firm is suing for breach of contract and false advertising, among other counts.

Localworks, launched by Yahoo last year, aims to boost small businesses by helping them to appear accurately in more than 40 online directories. Yahoo touts the tool as helping companies generate leads and become more visible in search results, directories and map applications.

But Wilson & Haubert allege that the tool didn't work as advertised. “Defendant has consistently misrepresented the benefits of the Localworks program,” the lawsuit alleges.

Yahoo did not respond to a request for comment.