SNP MEP Alyn Smith has warmly welcomed the publication of a robust European strategy to tackle the scourge of marketing scams, including misleading directory companies which have been catching Scottish businesses out for many years.
Scams such as the European City Guide and the European Medical Directory have been operating for years, despite attempts to limit their spread. The scam typically involves small businesses being tricked into signing up to contracts for inclusion in worthless or even non-existent "guides" or "directories" and thereby incurring bills of hundreds, if not thousands, of pounds in inflated advertising costs. The fraudsters then threaten legal action in the expectation that some of their victims will pay up in an attempt to make them go away. As the police draw near they simply collapse their companies in one location only to relocate to another. With the spread of mass-marketing techniques, the most notorious operators of misleading directories can reportedly send up to 6 million forms a year.
Alyn has had many constituents get in touch with him after being caught out over the years and, despite repeated warnings and increasing political activity to try and halt the scam, there have been still regular complaints as more Scottish companies have been caught out. The financial damage to individual companies that results from misleading directory scams is estimated to be between €1,000 and €5,000 per year for each company.
After a European Parliament investigation into the scam in 2008, the European Commission was tasked with the job of halting the operations of these scammers. As a result, the Commission has now announced that it plans to beef up the existing legislation (the Misleading and Comparative Advertising Directive 2006/114/EC) to explicitly ban practices such as concealing the commercial intent of a communication, while at the same time stepping up enforcement of the rules in
"Time and time again I receive emails and letters from folk who have been taken in by these scammers, who write to me subsequently wondering what they can do to stop the barrage of correspondence threatening legal action if they don't pay up.
"As technology makes things even easier and cheaper for scammers to mass mail their fake offers, cases are on the rise. Despite the attempts by the Commission, by national governments and politicians across the EU to raise awareness of these misleading practices, we've not seen the results we would have liked. This is why we need tougher and tighter European-wide rules.
"I am delighted that we are finally seeing from the Commission what I have been campaigning to see for many years now - European-wide rules which close down the loopholes that these scammers have been manipulating for far too long. It is clear to me that this is one issue where an EU-wide approach really is an added value – where working together should stop these tricksters.
"For those who have already been caught out, it is too little, too late. That being said, I cannot criticise any efforts being made to avoid even more people having to deal with the stress of being hooked
by this scam."