What are false billing scams involving directories and advertising?
A directory entry or unauthorised advertising scam is a scam that targets small businesses, trying to bill you for a listing or advertisement in a magazine, journal or business register/directory.
The scam might come as a proposal for a subscription disguised as an invoice for an entry in a bogus international fax, telex or trade directory. Sometimes they are doctored to look like those used by genuine directory publishers.
Alternatively, you might be led to believe that you are responding to an offer for a free entry—but in fact, the order is for entries requiring later payment. Another common approach used by scammers is to ring a firm asking to confirm details of an advertisement that they claim has already been booked. The scammer might quote a genuine entry or advertisement your business has had in a different publication or directory to convince you that you really did use the scammer’s product.
If you refuse to pay, the scammers might also try to intimidate you by threatening legal action.
If you think that the publication is a legitimate one and you may have authorised an entry, ask for proof of its existence. You should also make sure you keep written records of authorisations for advertising or directory entries so that if you receive an invoice or a telephone call, you can go back to your records to check it. Always get proof of the entry before paying anything. You do not have to pay for any directory entry that you did not specifically authorise in writing.
Another way to look into the legitimacy of the directory is to ask for details of other local businesses that have previously advertised and check with them that they received what they paid for.
Be sure to check with your local fair trading agency—they can tell you if they have taken legal action against the person who has contacted you.
The ACCC has recently taken legal action against a Spanish-based directory listing company, European City Guide S L, trading in Australia as Industry and Commerce. The Federal Court found that Industry and Commerce had misled Australian businesses, who thought they were dealing with an agency of the Australian Government. The Court ordered Industry and Commerce not to pursue payments, which could be up to $1600 per year, from businesses who were misled. For further information about this case, refer to the ACCC’s media release.
The ACCC warns business owners to be wary of unsolicited letters/emails that may appear to be trade mark, patent and/or renewal invoices. If you own a registered patent and/or trade mark, you may find yourself the target of letters/emails regarding overseas registration of your application. If you are unfamiliar with the organisation, especially letters/emails requesting payment for unsolicited services, you should treat the request with extreme caution. For more information about this, refer to IP Australia.
Never pay for an advertisement or entry you didn’t authorise. If you receive a telephone call or an ‘invoice’ that comes from a publication you have never heard of, or that you don’t remember putting an entry in, don’t pay or give out your details until you have looked into the matter further.
If you have received a fraudulent directory entry or advertising invoice or phone call, or if you have sent money to pay for an entry or advertisement which you now realise is a scam, you can report it through the SCAMwatch website. You should also spread the word to your friends, family and colleagues to protect them.
If you have received an unsolicited letter/email that appears to be a trade mark, patent and/or renewal invoice, contact IP Australia.