The business directory's 'hidden numbers'

By Kevin Peachey
Consumer affairs reporter, BBC News

Business people are targeted by e-mail or on the telephone

Start a small business and one of the initial challenges is to get your name on the grapevine.

So when an invitation came for Lisa Glover to enter her details on a European-wide business directory, she liked the idea.

But the 28-year-old had unwittingly fallen into the most prevalent business-to-business trick in the UK.

The worst examples of these bogus directories have the cost of inclusion hidden in the small print.

While these may have been around for years, the victims usually haven't.

I assumed it was just another type of free directory Victim Lisa Glover

Lisa, from Andover in Hampshire, set up Satnav2go two years ago with her father. The internet-based business hires out GPS systems to holidaymakers.

She was formerly a payroll supervisor at a firm of chartered accountants.

The birth of her son Jamie meant a change of priorities and a wish for more time to be spent at home.

"Having my own business meant I could stay at home with the little one, and maybe make enough money to pay the food bill," she says.

At a time when she was looking to give the business more of a profile, she received an unsolicited e-mail about entry onto a listings website.

"I assumed it was just another type of free directory," she says.

She signed up.

High price

The Euro Business Guide had a catch. While it promised that "updating is free of charge", there was a nasty surprise in the terms and conditions.

They said: "I hereby order a subscription... I will have an insertion to its data base [sic] for three years. The price per year is Euro 990".

Lisa said that skim-reading the small print meant that she missed the price. She received an invoice for 990 euros and is expecting another two in the next two years - but she does not intend to pay.

She says she has since received demands for the cash and the threat of an "administration fee" on top.

"I went on the internet and found so many people complaining about it," she says.

Hiding the true cost of a service in the small print is against UK law, and is now covered by the Business Protection from Misleading Marketing Regulations 2008 which came into force on 26 May.

But while this allows the Office of Fair Trading (OFT) to take out an injunction against any UK companies running misleading business directories, the OFT does not have the jurisdiction to tackle the majority that are based overseas.

'Great anxiety'

Mike Lambourne, head of the OFT's Scambusters team, said this limited the OFT to passing information on to the relevant authorities in other countries and handing out advice to small businesses to try to avoid the problem in the first place.

Businesses that are threatened... should remember that ultimately only a court should decide whether they are liable to pay Mike Lambourne, head of Scambusters

"We are aware of the great anxiety that demands for payment of unsolicited or unwanted goods and services can sometimes cause to small businesses," he said, in a response to an MP who highlighted one case.

He said this had become the most prevalent business-to-business scam, overtaking the bogus data protection circular of recent years.

He stressed that business people should not be pressurised into paying for services that had not been agreed to, were not provided, or did not match those agreed to.

"Businesses that are threatened with debt collectors or a credit 'black-listing' should remember that ultimately only a court should decide whether they are liable to pay and disputes with another business would not necessarily affect a credit rating," he said.

"If they have concerns over what they have received, how a 'debt' can legally be pursued or their legal rights, they should consider taking legal advice."

Lisa Glover continues to receive demands for payment.

It appears that the Euro Business Guide is a product of EU Business Services Ltd, a corporation organised and existing under the laws of Nevis in the West Indies.

No response was received when the BBC tried to contact those running the Euro Business Guide directory.

Mr Lambourne said the OFT had previously written to the Ministry of Finance, Trade and Industry in Nevis to highlight the activities of another business directory publisher trading from there, but had received no reply.