City guide scam

A number of companies are being asked to pay hundreds of liri by a foreign firm with whom they unwittingly signed a three-year contract.

The companies involved had received a mail shot by the Spain-based European City Guide - which publishes a printed and electronic guide of companies and businesses in Europe - asking them to confirm data it had about them. Small print included in the mail shot informed the companies that they would be bound to pay an annual fee.

According to the Consumer and Competition Division, the form was essentially a contract, binding the addressees to pay €937 (Lm401) a year for three years in return for the European City Guide's services.

Contacted by The Times, division case officer Theresienne Bezzina said 26 companies have contacted the division over the past three years after signing the contract and were asked to pay the fee.

She pointed out, however, that this was probably just a fraction of the number of companies affected because many would have gone straight to their lawyers instead of referring the case to the division.

Dr Bezzina said it seemed the Spanish company had sent the form to a number of different types of companies because complaints were received from hairdressers, interior designers and restaurants among others.

After signing the contract, the companies have a seven-day cooling off period during which they can change their mind and cancel. Most companies would not have realised they had signed a contract and therefore did not cancel, Dr Bezzina said.

The companies that signed the contract were receiving letters from the European City Guide asking them to pay up. Dr Bezzina said interest was also charged to the companies that failed to do so.

The division is advising companies that feel they have been cheated into signing the agreement not to pay and instead write a letter to the European City Guide asking them to cancel their entry and the contract immediately.

She warned that the contract was automatically renewable and therefore companies should point out that they want to cancel.

This incident highlights the importance of reading the small print before signing any papers, Dr Bezzina said.

The Consumer and Competition Division has no powers to investigate the matter and cannot accept any more formal complaints on it.

Dr Bezzina said last January the European City Guide established the Client Defender - an external client defence service - designed to resolve claims filed by its clients. Information on the service can be found at www.defclientecg.com

The European City Guide has irked many companies across Europe and a website giving information about the company and informing people what they should do has been set up.

The website - www.stopecg.org - informs companies that the "golden rule" that can stop the guide scams is never to pay up. "If you accede to the demands of any scam guides you are directly assisting them in this industry of trickery and fear," it said.

Stopecg said there would be times when the European City Guide puts pressure on companies and they feel like giving in. However, it reminded them that their money would be used to "put others through the same hell" and urges companies not to pay.