Be #scamsavvy: Directory Scams Target Irish SMEs

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Written by AMAS

Friday, 01 April 2011 17:38

Irish SMEs and sole traders are being encouraged today to be scam savvy. The National Consumer Agency is running a “Be Scam Savvy” campaign today, on foot of research that shows that more Irish consumers are being targeted by scammers.

One of the European City Guide forms being sent to Irish SMEs

But SMEs and sole traders also need to be vigilant, according to the NCA, because they are being hit by various scams, such as directory scams.

One of the most notorious of these, the European City Guide, is currently targetting Irish businesses. The forms they send out look official but are intentionally misleading. They give SMEs the impression that by updating your details you will receive a free listing in an online / CD-Rom directory.

Check the small print though: it reveals that you will be tied to a three-year contract which will cost €997 a year plus VAT “if applicable”. That’s nearly €3,000 plus VAT – for a worthless listing, on a website that’s blocked by leading virus-checkers!

“The scam then pursues their victims relentlessly, bullying, harassing and demanding payment and threatening court action, which, to my knowledge, they have never taken in the UK.

“Instead they work hand in hand with related debt collection agencies to intimidate people into paying and have made many victims’ lives a misery.

“If victims refuse to pay then their ‘debt’ increases and the scams will then offer a compromise discount. This too is just another strategy to trick people into paying.”

- former UK Labour MEP Richard Corbett

Many Irish businesses big and small have been caught out, and there have been some moves at EU level to clamp down on directory scams.

Maltese MEP Simon Busuttil told the European Parliament in November 2008 that the parliament had “received more than 400 petitions from small businesses (reflecting only a fraction of their number) who claim to have fallen victim to misleading advertising by business-directory companies and to have suffered, in consequence, psychological stress, feelings of guilt, embarrassment, frustration and financial loss.”

How to handle this scam

So what should your business do if you get one of these forms?

1. Don’t sign up and don’t pay any money

The “European City Guide” is currently based in Valencia in Spain. But if authorities close them down in one jurisdiction they are liable to pop up in another.

So avoid anything that looks like a directory scam – and steer clear of forms which feature the names “European City Guide”, “UK Internet Register”, “Construct Data Verlag”, “Novachannel” and “DAD Deutscher Adressdienst GmbH”.

2. If you have already paid some money, don’t pay the next instalment

The “Stop The European City Guide” campaign says on its website: “We have no evidence that the ECG has ever taken anyone to court for refusal to pay after signing a misleading contract, yet they have threatened thousands with legal action. The ECG has suffered both civil and criminal convictions for misleading advertising, fraud and attempted fraud. This makes it almost impossible for them to legally enforce these disputed contracts.”

3. Get informed and involved

The NCA’s research has shown a major increase in online scams, and it notes that more and more scammers are “trying to localise scams such as sending emails purporting to be from Government bodies, such as the Revenue Commissioners, from Irish banks or even sending the emails in Irish”.

So it pays to be on your guard and informed about how scams operate – both for your business and in your personal life as a consumer.

Get involved in the National Consumer Agency’s “Be scam savvy” campaign on Facebook, and read its guides on how to spot and avoid common scams.

4. Get visible – the legitimate way

Scams like the European City Guide prey on SMEs’ need to increase their web visibility. In the real world there’s no quick fix to search engine optimisation – it’s an ongoing process using best practice and proven techniques.
As part of this process it’s important to get your business listed in online directories – both free ones like Dmoz.org and relevant paid-for ones that are not scams and don’t cost you thousands of euro.

The National Consumer Agency is an AMAS client, and we are involved in the NCA’s “Be Scam Savvy” campaign on Facebook and Twitter. You’ll find the NCA on Twitter on @NCA and the hashtag for today’s campaign is #scamsavvy. Follow AMAS on Twitter @AMASinternet.