ACCC warns about business directory scams

Businesses should be aware of emails offering free business directory listings which in reality are scams designed to cheat SMEs out of thousands of dollars, the corporate watchdog has warned.

The Australian Competition and Consumer Commission has received over 1,000 complaints and inquiries this year about the scams. Two organsiations, world-businessguide.com and world-businessdirectory.com, have been subjects of the most recent complaints.

The ACCC said that the two organisations send emails asking for businesses to complete a form so their details can be updated on an online directory, stating the service is “free of charge”.

But the “directories” then contact the businesses and demand large sums of money for their accounts to be updated. Businesses that pay the money and then inquire about the transaction are told a legally binding contract has been established, and no refunds can be offered.

An ACCC spokesperson says SMEs should be “extremely vigilant” when assessing these types of emails.

“The best thing to do is keep records of your emails, and be wary of unsolicited offers, particularly those offering a free service. If you respond to an email, know who you are dealing with, have a look at the website and see if it’s worthwhile.”

“If you think you might be interested in a directory offering, then see if they are of any value by asking another business which has been dealing with them. Read all the terms and conditions of the deal, and if you aren’t 100% certain then don’t respond.”

The spokesperson also recommends contacting the relevant authorities if they believe they have been contacted by a fake directory.

“If you become aware of a scam, then make sure you tell an industry association member, or something like that, so that you can report it and make sure it’s followed up. Businesses need to practice extreme vigilance.”

ACCC chairman Graeme Samuel said in a statement it is difficult to locate the businesses involved in the scam, as many are international operations.

“From the ACCC’s investigations, it appears that World Business Guide and World Business Directory are using virtual office services or post office boxes across several countries including the Netherlands, Spain, United Kingdom, West Indies and Eastern Europe.”

“The use of automated mail forwarding services can unfortunately make it almost impossible to locate where a business is really situated. This is of particular concern given that these businesses are using, what the ACCC believes to be blatantly unfair tactics in an attempt to trick Australian businesses into subscribing to their services.”

Samuel said businesses which have been subject to scams must contact the ACCC’s ScamWatch department.