Smart Consumer: Beware -- scam ad directory is targeting small Irish firms
Published 04/08/2011 | 05:00
Every so often an issue arises but just doesn't go away. So it is with the European City Guide (ECG), a business listings directory, sold exclusively online and yours for €29.
That an Irish consumer would find listings for local locksmiths in Latvia or plumbers in Poland useful is questionable.
What isn't in question is that many small businesses in Ireland and Europe have been mislead into signing up to this directory and find themselves unwittingly in a three-year contract for €1,000 a year.
Many pay up just to stop the demand letters from arriving.
Originally based in Barcelona, the Catalan authorities took action against the European City Guide's misleading practices in 2003 and fined them €300,000.
And what did the ECG do? It moved to Valenica (the nearest Spanish Autonomous Community), resumed its operations and has been hoodwinking people into paying up ever since.
Jess's dad runs a small business in Dublin, and in April he received in the post what to him looked like a survey gathering information on businesses in Europe. He filled it in, sent it off and thought no more of it.
That is until he received an invoice for €1,000. When he called them they told him he had placed an ad with them and now must pay.
Every fortnight since then, he has received "aggressive letters" first requesting payment and then threatening legal action.
"He has no way of benefiting from the services provided by that company," says Jess, "and to be quite frank, he literally can't afford it!"
He's not alone. In June, the European Parliament Committee on Petitions and the Committee on the Internal Market and Consumer Protection said "hundreds of letters of complaint are still being received by MEPs from new victims of such directory companies".
"The victims are often too small to afford legal fees to wage legal action on the directory companies. On the other hand paying the fees which they were tricked into signing for has put several such organisations in severe financial hardship."
MEP Mairead McGuinness, who has advocated for businesses affected by this for several years, says "that the best thing to do is to be aware of this "scam" and to avoid the company at all costs.
"But if you have unwittingly signed up, she advises you "to tough it out and do not be bullied".
Not paying up when you are receiving payment demand and threatening letters isn't easy, but bear in mind that both McGuinness and the European Consumer Centre say that to the best of their knowledge the company, despite its threats, has never taken anyone to court for non-payment.
But why can't the company be stopped?
There is a Directive on misleading advertising that outlaws such practices and it covers business-to-business transactions as well as individual consumers, so either that isn't strong enough or isn't being enforced adequately.
Thanks to her work and that of other MEPs, in June the Parliament passed a resolution, which, among other things, urges the European Commission to "speed up its activities with regard to revising and improving the Directive".
In the meantime, tell anyone you know in a small business to be on the look-out.