SEMA is alerting its members that a one-page form they may receive offering a "free" business directory listing is not free when you sign the form. Examples of business directories include “World Business Directory,” “Expo-Guide” and “The Fair Guide” and are generally operated outside the United States from the Netherlands, Mexico and Austria and other countries. SEMA recommends that you not complete these types of listing forms.
Here is how a “free listing” scam works: A group collects your company's name and mailing address from the Yellow Pages or other publication, and then sends you a form asking you to provide supplemental information (phone, fax, e-mail, etc.) for your "free" listing in their guide. Nevertheless, the fine print at the bottom of the page states that by signing and returning the form you have agreed to pay for the listing. It can be a substantial amount, such as 995 euros/year for three years. The group then sends you a collection letter several weeks later. If you don't pay, they continue to send dunning notices and threaten litigation.
While SEMA cannot provide advice on how to respond to collection tactics, we note that many companies have disputed the validity of the contracts and successful legal actions have been pursued. For example, the Austrian Advertising Council found The Fair Guide to be a breach of the Austrian Advertising Code and its operator, Construct Data, signed an agreement to cease mailing the misleading contracts from Austria and to cancel their demands for disputed monies. Here are links for more information on the three example guides:
Here is a link to a sample letter that may be sent to Construct Data when disputing a dunning notice: www.stopecg.org/cdcancellation.doc. It may provide guidance when disputing notices from other companies.
To file a complaint in the United States, you may wish to contact:
Federal Trade Commission
Office of Business Fraud
600 Pennsylvania Ave. N.W.
Washington, D.C. 20580
For more information, contact Stuart Gosswein.