Galway City Labour councillor Niall McNelis is urging Irish businesses to take part in the European Commission public consultation on misleading directories launched last week. He also believes the Commission should follow this up with proposals to strengthen EU legislation against these scams.
Councillor Mc Nelis said: "I have been contacted by small firms, sole traders, professionals etc who've fallen victim to the so-called 'misleading directory' scam. This typically involves a firm receiving a form from a 'directory' company asking them to update their details, seemingly for free. Signatories later discover they have signed up to a contract with a fee, normally €1,000, and receive increasingly threatening letters when they seek to annul the 'contract'. Because the directory company is based in a different country, victims can find it difficult to get protection or redress from national authorities. These scams place a considerable financial burden on small firms and can cause enormous stress and worry.
"This is a problem in Ireland and across Europe. A survey by the Irish Small and Medium Enterprises Association (ISME ) in June indicated that 57 per cent of over 700 firms surveyed had been the victim of such scams in the preceding year. It was reported in August that the HSE had paid €7,000 between 2005 and 2008 to a directory company based in Spain to include details of three hospitals in Galway, in a non-existent directory. A European Parliament survey in 2008 documented 13,000 complaints to MEPs, while over 400 petitions have been tabled to the EP in recent years.
"I would urge the victims of this scam and the representative bodies for SMEs to take part in the online public consultation launched this morning by the Commission. This runs until December 16 and is aimed at gathering data from all over Europe about the extent of this problem.
"It is clear that the EU Directive on 'Misleading and Comparative Advertising' (Dir 2006/114/EC ) applying to 'business-to-business' transactions in place since December 2007, is not protecting firms from this scam. There is a need for stronger EU-wide regulation in this area. As the European Parliament stated in June, the Commission should come forward with proposals to strengthen this Directive and other relevant EU legislation so as to put an end to these practices as soon as possible.”
