Press Release

16/12/2008

Misleading Directories of Companies: Time is running out for business scams. Simon Busuttil MEP

The European Parliament today overwhelmingly adopted a report by Simon Busuttil MEP on combating business directory scams. The vote was adopted by 632 votes in favour and 4 votes against.

Each year, several thousand businesses fall victim to scams based on misleading advertising whereby they unintentionally sign up to a listing in a business directory costing them up to €1000 a year.

The adoption of this report marks an important step forward in putting an end to this scam because it lists a set of concrete measures to achieve the following objectives:

• To raise awareness so that fewer businesses become victims.
• To enable victims to resort to a clearly identifiable authority to make a complaint and seek a remedy.
• To ensure that existing EU laws on misleading advertising scams are adequately enforced in EU countries.
• To tighten existing EU law so that it can address such scams more directly.

The report also advises victims not to pay any fees requested of them by misleading business directories until they have reported the matter to the authorities and sought advice on how to proceed.

The European Parliament received more than 400 petitions concerning this scam mainly from small businesses across the European Union. Most complaints singled out the directory known as the European City Guide whereas some others complained about Construct Data Verlag, Deutscher Adressdienst GmbH and Nova Channel.

Addressing the plenary session of the European Parliament, Busuttil lamented that the company operating the European City Guide had lobbied intensively to undermine the European Parliament's report but, in the end, it was unsuccessful.

Busuttil also called on the European Commission to do more than it has done so far on the matter.

"It is not enough to say that it is for individual EU countries to implement EU law", he told Commissioner Vladimír Špidla. "As the guardian of the Treaty, it is also your responsibility to see that EU law is adequately implemented at national level."

"I want to send two messages", Busuttil concluded. "The first is for victims of business scams: we have taken note of your concerns and we are squarely behind you. The second is for the misleading directory companies themselves: your time is running out. Stop the scam immediately because from now on the European Parliament is watching you closely."

Scams operated by misleading business directories

Business directory scams mostly target small businesses, but non-profit entities such as schools, libraries and band clubs have also been targeted. The scheme relies on misleading advertising whereby offers are sent out by mail, giving businesses the impression that their details would be listed in a business directory free of charge. Subsequently, however, those who sign up discover that they have been conned into a three-year contract costing some €1,000 per year.

The scheme takes advantage of legal loopholes which make it difficult for national authorities in various Member States to take action, as they do not have the authority to act across European borders. As a result, misleading business directories have been sending out offers in various Member States and have also moved their operations from one Member State to another.

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For more information:
Simon Busuttil MEP, Tel: +32-2-2847686
David Stellini, EPP-ED Group Press Service, Tel: +32-473-541926

Note to Editors:

MEP Simon Busuttil is the European Parliament rapporteur on the Misleading Directory Companies' report.

The EPP-ED Group is the largest political group in the European Parliament with 288 Members from all 27 Member States.