Parliament supports report to outlaw directory scams

After years of campaigning the European Parliament has finally adopted a devastating verdict against directory scams like the European City Guide. Maltese MEP Simon Busutill's report was adopted by a massive majority of 632 in favour and just 4 against, with only 12 abstentions.

The report strongly condemns the methods of directory scams and called on all EU countries to follow Austria's example in specifically outlawing the practises used by groups like the European City Guide. This can be helped by the Commission presenting draft proposals to extend the scope of the Unfair Commercial Practices Directive to specifically prohibit advertising in business directories unless these entries warn prospective clients that they are being offered a contract against payment. It also demands that the European Commission ensure that the all countries are correctly implementing and enforcing the Misleading Advertising Directive, which these scams clearly fall foul of, and include a "black" list of misleading practices - a measure which would help increase public awareness of these scamming organisations.

But this vote is just the start. We still need to convince the European Commission and Member States to play their part and I don't think anyone is naive enough to believe the scamsters will simply give up. But it is, hopefully, the start of a co-ordinated effort to ensure that such fraudulent business directories are put out of business.

Nonetheless, there may be still a lot of work to do but the message from the European Parliament is clear: scams like the European City Guide are unacceptable and illegal.

I must also pay tribute to Jules Woodell, who runs StopECG, and has worked tirelessly for years against the scams and deserves plenty of recognition for the huge part he has played in organising victims into such a strong group that they successfully campaigned for a report into the scams by the Petition's Committee.

Away from the issue itself, the 12 MEPs elected for UKIP in 2004, astonishingly for even them, managed to take four different positions on the Busuttil report. Ashley Mote abstained, Kilroy and Tom Wise voted in favour, Roger Knapman voted against and the rest didn't vote at all (though I understand Godfrey Bloom was kept home by a serious family commitment). I was also disappointed to see that Tory Edward McMillan Scott abstained on the report, although I hope that his vote was a case of just pressing the wrong button.

Parliament adopts report to tackle European City Guide scams

I was delighted this morning when the Parliament's Petitions Committee unanimously adopted a report by Maltese Christian Democrat, Simon Busuttil, on the European City Guide and other misleading business directories, a subject on which I have blogged on before.

I have been the Shadow spokesman for the Socialist group on this report. Simon has done an excellent job, and the report adopted by committee is a good one. In particular, the report calls on the European Commission to ensure that all countries in the EU are implementing and enforcing the Misleading and Comparative Advertising Directive adequately.

It also calls on the Commission to follow the example of Austria which has specifically extended its Unfair Commercial Practices legislation to business directories which use the methods of the ECG, and propose amendments to the Misleading Advertising Directive specifically to prohibit advertising in business directories unless prospective clients are clearly informed that such adverts are solely an offer for a contract against payment. Such a change would close the legal loopholes that are currently used by the European City Guide and other fraudulent business directories.

Above all, this report demonstrates that scams like the European City Guide must be stopped. It also, again, emphasises that this a problem that crosses borders and each year thousands of businesses, charities and voluntary groups across Europe are tricked into signing up to what looks like a perfectly innocent business directory. In reality they are tricked into a complex contact and face aggressive demands for money and no chance to cancel the contract.

The Busutill report, which will probably be debated and voted on the floor of the Parliament in December, is not the end of the matter. While we work to pressure the Commission to eradicate the problem through law, we must also use the opportunity to raise awareness to victims to whom the advice about the ECG and other directory scams remains the same: don't fill in the forms and refuse to pay them any money, and if people receive any suspicious forms from such companies they should rip them up. For more information, check this video link.


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EuroparlTV

The European Parliament has launched an online TV service to help make EU matters more accesible, particularly to younger people.

You can check the site out by clicking here

There is already a video about the problem of the European City Guide online. It's in the Your Voice section of the site.

Encouraging news in the battle against directory scams

Some good bits of news about the battle against the European City Guide and its various dubious guises.

The European Commissioner for consumer protection, Meglena Kuneva, has written to me stating that should the number of complaints against directory scams not decline then she will step-up her investigation into possible actions the Commission can take. So, any people who have been victims of the directory scams, anywhere in Europe, should make the effort to register their complaints to the Commission (as well as any national authorities) so the extent of the problem is made clear. Letters should be addressed to Commissioner Kuneva, European Commission, Rue de la Loi 200, B-1049 Brussels.

My Labour colleague Arlene McCarthy, who chairs Internal Market and Consumer Protection Committee, has also joined the campaign and is asking to extend consumer protection law to business-to-business transactions, something which would help protect victims of the scams.

I have also heard today that the European Parliament’s Petitions Committee has now started on its report into directory scams and, beacause of the delays, they are keen to press on quickly with their investigation, with a meeting with victims and campaigners against the scams set for May. Simon Busutil MEP is still the rapporteur and evidence against directory scams and any suggestions for action should also be sent to him at the European Parliament, Brussels.

Realistically the problem of directory scams is not likely to be solved soon but there is now at least a consensus building that the scams are a blight on small businesses across Europe and it is an issue that the EU can help deal with

ECG programme on You and Yours

BBC Radio 4 finally got round to airing their piece on You and Yours about the European City Guide.

You can listen to it here for the next week.

ECG programme postponed again!

A quick update on BBC Radio Four's You and Yours programme on the European City Guide and other directory scams.

The prorgamme has again be postponed and is now due to be aired, next Monday, January 21st, just after noon.

You and Yours programme postponed

The You and Yours programme which was due to go out just after noon today has been postponed while BBC Radio Four await a response from the European City Guide.

The rest of the programme will be recorded today but it will only go out after the European City Guide have been given a certain amount of time to respond.

I imagine it's unlikely the ECG will want to contribute but perhaps the fact it's Radio Four will make them think again. We shall see.

Radio Four to do show on ECG scam

The European City Guide and its family of deceptive mailing scams continues to produce a steady stream of correspondence from angry victims who are being pestered incessantly by the firms and their debt collection agencies.

Such is the omnipresence of the scam the media is starting to take real notice. At the end of last year I appeared on Radio York to talk about the scam and tomorrow I will be taking part in BBC Radio Four’s You and Yours programme which will lead on the scams.

It starts at 12.05 and if you miss it, it will be on the Listen Again facility for a week at www.bbc.co.uk/radio4/youandyours/

Slowly but surely, pressure is growing on the European City Guide and the suspiciously similar array of other directory frauds, that use misleading forms to con people into signing up to a virtually worthless website or magazines for a fee of around 1000 euros a year, with scant opportunity to cancel the contract.

The number of complaints made to the European Parliament’s Petition’s Committee about the ECG last week resulted in a discussion about how best to combat the companies that send out these endless series of forms.

Jules Woodell, who runs the stopECG website, blog and support group, was invited to the meeting and explained how the companies worked. He made abundantly clear the trouble the ECG poses for small businesses and the bullying victims face if they refuse to pay.

I took the opportunity to make proposals to take matter further with the committee agreeing to draft a report that will look into ways and means of dealing with directory scams: whether a change in legislation is needed, how to co-ordinate national measures, mutual information on prosecutions and the results of court cases.

There is still a lot of work to do, particularly because the ECG is so quick at adapting to and bending regulations, but finally there is a real possibility that the EU can outlaw these scams or at least regulate them to the point where people can not be fooled.

Read Jules's account of his trip to Brussels by clicking here.

The days of the European City Guide (ECG) publishing scam could now be numbered following recent actions taken at EU level and by national courts.

Way back in 2003, the ECG was ordered to close for one year and fined €300,000 for misleading advertising by the government of Catalonia. However, those behind the ECG have stubbornly refused to obey this ruling, conducting a number of appeals and continuing with their bogus operations. I have learnt that the High Court of Justice of Catalonia has now rejected the ECG's appeal.

The Consumer Protection Cooperation regulation, which was transposed into EU law by the Member States in January, will see public enforcement authorities from the Member States working together to tackle cross-border scams and systematic abuses of EU consumer protection rules.

More recently, I reported here about the court judgement against Construct Data Verlag (CDV) in Vienna, where CDV agreed to stop sending their misleading "Fair Guide" business directory, which invited customers to verify the company details already printed on an attached form and to sign the response. By signing the form the respondent automatically and unwittingly placed an order which (CDV) then chased payment for.

Lastly, in March, the ECG was condemned by the Brussels Criminal court on the legal grounds of misleading advertising against the practice of business. Although the court did not order ECG to close, it imposed a fine of €275,000 on ECG which was also instructed to reimburse victims.

Although those behind the ECG seem determined to continue with these shameless scams by creating a number of offshoot bogus publishers (including CDV, Novachannel and DAD Deutscher Adressdienst GmbH), these recent developments will beef up the powers of police and public authorities and show that courts are consistently coming down hard on the ECG.

It was with some surprise that I received a letter from the “UK Internet Register” offering to list my website for a staggering £639 per annum, for a minimum three year period.

Of course the price was hidden in the small print and the company you place the order with is actually the DAD Deutscher Andressdienst GmbH.

From the outrageous price to the envelope they provide you to send the form back, this bares all the hallmarks of another branch of the European City Guide.

While there is currently no proof the UK Internet Register is owned by the same man as the European City Guide, it is unerringly similar.

Needless to say, should you receive one or know someone who has, do not sign it!

For your money you will get your website listed on a webpage (the address of which is also hidden deep in the small print), which is obviously nowhere near as effective as any internet search engine which will list your site for free.

Absurdly, the UK Internet Register do actually link to my website, which as you will know hosts a Stop European City Guide page and has plenty of blogs warning about companies that exploit small businesses with misleading contracts!

As always the Stop the European City Guide website and blog are on the case, and currently have a picture of the contract being sent out.

This is a reasonably recent mail-out so please spread the word of its existence and help ensure as few people as possible are conned by it.

Some good news from Austria about one of the European City Guide’s (ECG) unscrupulous sister companies.

Regular readers will know the ECG, and a whole host of equally deceitful sister companies, con small businesses into signing up for what looks like a “free” listings service that turn out in the small print to be expensive contracts and lead to regular harrasment by debt agencies owned by the same group.

In January 2006 Construct Data Verlag AG, which Swiss newspaper Tages-Anzeiger revealed was owned by the same person as the European City Guide in 2005, was taken to court by the Schutzverband gegen unlauteren Wettbewerb, which represents Austrian commercial enterprises.

The Schutzverband wanted Construct Data to stop sending out new contracts and prevent them from profiting from previously mailed contracts. With the writing on the wall Construct Data settled out of court.

While this means another of of the ECG-style companies again avoids an explicit court judgement, the settlement does mean Construct Data will cede to all of the Schutzverband’s original demands, which is a major blow to them.

Any Austrian companies that were scammed by Construct Data can now write to them and cancel their “contracts”, which should mean an end to the calls and letters from the debt collection agencies. Construct Data, who published, without a trace of irony, the Fair Guide, had plenty of victims in the UK and I would encourage anyone who is still being pestered for money by them to do the same.

Being sensible I have to add this could lead to a court case but it is extremely unlikely. After all, this whole episode with Construct Data again shows just how reluctant the ECG and its other companies are to go near a court. Beyond deception and bullying they are at a loss what to do.

For more information and who to write to about Construct Data’s Fair Guide visit the stopECG blog.

For those fluent in German you can read more about the case on the Schutzverband’s website by clicking here.

On the subject of the ECG, a constituent from Sheffield who works for a charity, copied me on their letter to the ECG, and what an articulate attack on the ECG it is! I reproduce the full text below.

Dear Sir/Madam

Re. Deutscher Adressdienst GmbH / Gravis Inkasso Gmbh / European City Guides / Meinolf Ludenbach

The sinister operations of the organisations associated with Meinolf Ludenbach have recently received significant press coverage in this country (see enclosed cuttings). We are fully aware of who you are and the type of scam companies you are. Therefore could you please remove our company’s name from your mailing list, cancel any supposed contracts we have with any of your companies and refrain from further harassing and threatening our staff. I have copied this letter to the fraud department of Interpol and Richard Corbett MEP who is leading the attempt to clamp down on your activities in the European Parliament.

Our lawyers have looked at the documentation you have sent to us and have firmly stated that nothing is legally binding as it was deliberately formulated to entrap lower level administrative staff into signing when they believed they were just correcting contact details. Should you wish to persist with any unsubstantiated demands for payment then we would be delighted to defend our actions in court. The StopECG collation have also agreed to support our defence and say that they would relish the chance to see your unscrupulous activities exposed in a court of law, like they were previously in Barcelona.

If you would prefer to avoid this then please refrain from contacting any of our staff again. If any one of them receives any further written or verbal communication from you then we will apply for a restraining order and then prosecute you for harassment.

On a personal note, can I also add that trying to rip off charities and then threaten their workers, who strive only to do good for the world, is one of the most unpleasant and downright evil activities I have ever heard of. I hope that all your employees feel completely shameful when they wake up every morning and I look forward to the day that justice catches up with you. Can I also say that we would gladly give away all our charity’s assets and declare the organisation bankrupt before I would give a penny of it to any organised criminal organisations, like those associated with Meinolf Ludenbach.

I trust that this concludes this matter.

Yours sincerely,

AN Other

I have received an interesting letter from solicitors acting on behalf of European City Guide, saying that a press release I put out last year (click here to view) was inaccurate and wanting me to change it. Now, I can't change it retroactively, but did say I would be happy to elaborate on the point they raised.

The solicitors claim their client "European City Guide" was not fined by the Spanish authorities for misleading advertising practices.

Hmmm! That will be news to the Advertising Standards Authority and to the European Advertising Standards Alliance, both of whom have articles on their websites
about ECG.

Briefly, the complaints about ECG refer to a form they send unsolicited to companies, offering to advertise their services. There is a section on the form called "request order" which appears to be a request to find out more about the offer and ECG services. However, the devil is in the detail - the mailing gives the impression that the directory entries are free and did not make clear that signing and returning the mailing, even merely to correct an address or give the information about the type of business activity, would commit recipients to paying for three entries and a copy of the advertisers' directory, totalling hundreds of pounds.

As to the solicitor's complaint, let me just point out:

1999 - Catalan authorities (Generalitat) open a file against ECG

2001 - Generalitat rule ECG form misleading and impose fine. ECG appeal against fine.

2002 - Court of First Instance in Barcelona rejects appeal and confirms the previous administrative decision. ECG appeals against this decision.

2003 - the Superior Court in Catalonia rules a new sentence, fully confirming the previous one. ECG appeals against this decision.

The aforementioned rulings and judicial sentances refer to the first ECG form, circulated in 1998 and 1999. It was slightly different to the one circulated in 2000 and 2001. The Catalan authorities opened a new file relating to the 2000/2001 form and in 2002 issued a decision in which this new form was also considered to be misleading. ECG appealed against this decision before the Barcelona Courts and a new sentence was issued.

September 2003 the Court of First Instance in Barcelona issued a ruling confirming the second ruling of the Catalan statutory authorities.

The court also confirmed the fine of nearly 30,000 euro imposed on ECG by the Generalitat.

Finally, the Catalan authorities investigated a third ECG form which was circulated in 2001-2, launching an investigation on the basis of more than 1,500 complaints.

September 2003 saw the Catalan authorities (Generalitat) issued its decision that this ECG form too was misleading, and imposing two sanctions on ECG: a fine of 300,000 euro and an order to cease trading for one year.

ECG have appealed this decision. This means that both sanctions are temporarily suspended until the courts have heard the appeal. Although this appeal will have to be considered by the courts, there have beenthree administrative decisions and three judicial rulings on this case, all of them finding that ECG has acted in such a way as to intentionally mislead companies. So now we will wait and see whether this latest appeal produces a different result from all the previous ones.

Meanwhile, I would not recommend anyone to respond to their mailings, let alone give them any money.

Click here for my speech in the European Parliament on this matter.

I met the European Commissioner for consumer protection yesterday to discuss the growing problem of the European City Guide family of scams (click here).

It was a productive meeting. Commissioner Kyprianou confirmed that he is indeed aware of the scams and takes them very seriously. The Commission is currently reviewing consumer protection legislation to see where it can be strengthened, but this review doesn't currently include business-to-business issues.

Therefore, Mr Kyprianou also agreed to set up a meeting within his department to discuss specifically how EU law for business-to-business transactions might be improved. This will take place as soon as next week and will specifically take the ECG scam into account. I have been given the contact details of the person who will be leading the discussion and will call him next week.

Obviously the above points relate to more long-term actions. But the Commission only has the power to draft new EU laws and to enforce those that already exist - it can't influence judicial or police matters in member states.

However, the Commissioner also reported on recent communication with the Spanish authorities, where the European City Guide is currently based. Apparently, the Valencian consumer protection directorate has received 700 complaints lodged against ECG since 2003. Of these, they have upheld 450, resulting in the contract being cancelled and all fees reimbursed to customers. 150 more are still outstanding. (Presumably, the remaining 100 were dismissed - I don't know.)

The directorate also met with ECG a year ago. They ordered them to revise their contract in order to make it less misleading, and to publish a code of conduct on their website. Both these have now been done, as far as the Commissioner is aware.

The Commissioner confirmed that laws are already in place to protect both consumers and businesses against misleading advertising. He understands that ECG does not ever take its victims to court, and only threatens to do so, but he urges anyone who thinks they have been duped to go to court themselves, where the laws exist to protect them. It is for national jurisdictions and national courts to enforce the European-level laws. (More details here.)

So I would once again urge everyone who's being harassed by ECG to write to their MEP and to ask him or her to write to Commissioner Kyprianou. I am also strengthening my advice to victims of the ECG scam:

• Do not pay.
• Write to the Valencian authorities and make the following points: (1) the contract is still misleading despite the changes; (2) demand action against ECG; (3) demand reimbursement of any sums already paid, if there are any.
• Write to your local MEP and make the following points: (1) the contract is still misleading; (2) the Commission should take cases like this into account in their current review of consumer protection legislation.
• Take legal advice and consider taking the matter to court. EU-wide laws exist and the fact that the scam is based in another EU country will not prevent UK courts from implementing those laws. UK courts have the power to cancel contracts.

I also intend to write to all my MEP colleagues, asking them to treat ECG-related complaints from their constituents very seriously and to consider sending them on to the Commissioner.

Good news came this morning in the form of an e-mail from the Swansea shopkeeper who runs www.stopecg.org and campaigns against the European City Guide family of mailing scams. (See previous blog entries here, here, and here.)

As well as Switzerland’s ongoing investigation into the scam, more legal action is now underway. An Austrian consumer pressure group, the Schutzverband gegen unlauteren Wettbewerb (‘Association for Protection Against Unfair Business Practices’), is seeking an injunction in Austria’s highest court to prevent Construct Data, one of the ECG’s sister scams, from mailing their deceptive contracts to target businesses – and from collecting unpaid debts from past victims of the scam.

Consequently, stopecg.org advises the following:

This case has profound implications for those in dispute with Construct Data because if the injunction is successful it will stop Construct Data from collecting debts from misleading contracts mailed in the past. It is for this reason that we strongly advise companies in dispute with Construct Data to refuse to pay, at the very least until the outcome of this case is known. It must be understood that this case may not override civil action between Construct Data and a company in dispute with them.

An update on the campaign to halt the now infamous Europe-wide mailing scam that calls itself the 'European City Guide'. The last time I posted about this, it was good news: the international campaign against the ECG was starting to bear fruit, with police seizing evidence from the offices of a parent company in Switzerland and a criminal investigation underway.

Since then, there have been several developments. Firstly, the ECG scam turns out to be closely linked with a number of other scams, including 'Novachannel AG' and 'Construct Data' – in fact, a Swiss newspaper has recently uncovered that they are all owned by the same man! (Link to pay-only archive section of newspaper site.)

Secondly, and more worryingly, those people behind the scam have been concentrating their efforts on silencing those who are attempting to expose them. Their most recent step has been to target the main advice website for victims of the scam, entitled 'Stop the European City Guide'. Since 2001, this site has offered advice and support to thousands of companies across the UK on what to do if they are targeted by scammers. Site author Jules Woodell estimates that having an online support forum such as this has saved British firms hundreds of thousands of pounds in payments to organisations such as the ECG.

This isn't the first time that the 'Stop the European City Guide' site has been targeted by those it tries to expose. The method of bullying has changed, but the objective remains the same. In 2003, the site was successfully defended against an attempt by the ECG to silence it by making allegations of copyright infringement.

This time around, the strategy is different. Novachannel AG has employed a UK law firm to get the website shut down. Rather than contacting those involved in the site, the lawyers instead send threatening letters to the internet service provider which hosts the site. This hosting company plays no part in the campaign to expose the scams, so it has no reason to stand up to the threats. The result is that the website (www.stopecg.org) has been temporarily shut down.

What's so frustrating about this situation is that those people who campaign to expose the ECG and related scams would welcome a court case. Every time it's come to court (in both Germany and Spain), the courts have recognised the scam and ruled against the ECG. But, by bullying internet service providers rather than taking on the campaign itself, the scammers have found a way to silence their opponents without risking a court action.

These companies pose real threats to Yorkshire businesses, dozens of whom have been duped in the past. After 5 years of campaigning, I'm not about to give up. A major step would be to get the support website back online; the campaign continues…

I'm delighted to report that the company behind the 'European City Guide' scam is finally being brought to justice.

On 6 September 2005 the Swiss authorities announced that raids had taken place at the headquarters of a number of companies that had been under investigation during July. The move was taken following a number of complaints from all over Europe (including from Richard himself) relating to misleading forms sent directly to businesses across Europe. These forms appear to ask for information and display the phrase "cost free" prominently whilst hiding in the small print the fact that returning the form will lead to bills of almost €3000.

The European City Guide is one of a number of unscrupulous companies which is affected by these raids. The company moved to Valencia from Catalonia following a court case in 2003, when it was shut down for a year and fined.

Three other so-called business directory firms, one Swiss, one Austrian and one German, are also linked to the debt collection agencies which are under scrutiny. Therefore there does seem to be reason to suspect an international scheme of dubious business practices.

The Swiss Ministry for the Economy has submitted requests for proceedings to commence with prosecuting authorities in various cantons within Switzerland.

Until this criminal investigation is completed, however, the scams can continue. To help stop these unfair business practices occuring in the future and for more information on supporting victims and petitioning the European Parliament for legislation to deal with this problem, visit the campaign website at www.stopecg.org.

The campaign continues against a pernicious direct-mail scam known as the European City Guide.

The organisation works by sending a form directly to businesses across Europe. The form appears to be asking for info rmation and prominently displays the phrase ‘cost free', but hidden in the small print is a notice that returning the form will lead to costs of almost €3000 per year.

Since the year 2000 I have received complaints every year recently about the activities of this organisation. Already this year, more than a dozen constituents have asked me for help after having been duped into signing these dodgy contracts. It is targeting Yorkshire businesses again – and I myself received a mailing today!

My advice to anyone who receives a mailing from the European City Guide is to throw it away!

The ECG concentrates on small businesses and individuals, and once it has obtained a signature by deception it pursues a strategy of intimidation and bullying to try and extract payment.

The company has previously been pursued vigorously by Trading Standards and the Office of Fair Trading. It was eventually traced to the Catalan region of Spain. In 2003, a Spanish court fined the company heavily and shut it down for a year.

It now seems to have switched bases and is operating from Valencia. But its unscrupulous methods are the same.

A website has been set up which gives up-to-date information and support for victims of the scam: click here.

I also strongly support a petition to the European Parliament for legislation to deal with this issue.

A Europe-wide mailing scam is resurfacing this week. This morning I received a letter from the European City Guide inviting me to "update my details".

The organisation works by sending a form directly to businesses across Europe. The form appears to be asking for information and prominently displays the phrase ‘cost free’, but hidden in the small print is a notice that returning the form will lead to costs of almost €3000 per year.

Since the year 2000 I have received complaints every year recently about the activities of this organisation. It's now targeting Yorkshire again.

The European City Guide concentrates on small businesses and individuals, and once it has obtained a signature by deception it pursues a strategy of intimidation and bullying to try and extract payment. My advice to anyone who receives a mailing from the European City Guide is to throw it away!

The company has previously been pursued vigorously by Trading Standards and the Office of Fair Trading. It was eventually traced to the Catalan region of Spain. In 2003, a Spanish court fined the company heavily and shut it down for a year. It now seems to have switched bases and is operating from Valencia, but its unscrupulous methods are the same.

A website has been set up which gives up-to-date information and support for victims of the scam: http://www.stopecg.org.