Marketing scams: Some common examples
Data protection registration
Thousands of businesses have received letters from companies asking for payment for registration under the Data Protection Act. Such letters give the impression that they come from an official body and that you are legally obliged to register with that company immediately – at a cost of up to £100, plus VAT. While many businesses processing personal data are required, by law, to notify the Information Commissioner, they can do so directly for a fee of £35 per year. Often, small firms that process such data for limited purposes are exempt from notification altogether. For more information visit the website of the Information Commissioner or call the helpline: 01625 545745.
Health and safety registration
Businesses also need to beware of bogus health and safety organisations. Small firms have been sent letters requesting between £125 and £250 to become registered with a false enforcement agency that promises to run checks on their health and safety provisions. All UK organisations are required, by law, to register with a health and safety enforcement agency – either the HSE or their local authority – but this service is free of charge. The Health & Safety Executive never sends out unsolicited demands for money. It does offer a "Safety Starter Pack" for £30 and can advise on who you need to register with. Visit the Health and Safety Executive website or call the HSE infoline: 08453 450055. Alternatively, call your local Environmental Health Service for advice.
Business directories
Another regular scam relates to business listings either in published directories, electronic directories (CD-Roms) or on websites. Beware of ‘official-looking’ invoices from trade directories asking for your fax, internet and e-mail details. These might appear to be simple requests inviting a free listing but watch out for small print commitments to pay hundreds of pounds for an entry. If you reply, it is then claimed that you have entered into a contract for an expensive, yet worthless, listing obliging you to pay.
One example was a CD-Rom directory; free for the first issue but, in the small print, a commitment to pay £661 for three further issues. Assuming that some form of directory is actually published, there may be no criminal offence and an enforceable contract will be place.
Business rates
Unscrupulous ‘rate-reduction’ firms are also targeting small firms. In exchange for large fees, businesses are led to believe they will get their business rates reduced on appeal. In fact, the fees for the service may outweigh any benefit gained. Rates may also be increased. Typical claims are-
"We have a team of fully qualified professionals."
"We have achieved big reductions for several clients."
"We can get huge reductions on your rates."
"You will have nothing to pay unless we succeed."
None of these claims should be accepted without proof. Don't believe claims that are made before an investigation of your property has even been undertaken. Ensure you get a written contract and check it carefully to establish how much you will be liable to pay and when.
Your local valuation officer can discuss the rateable value of your property and provide an appeal form for free; information is also available on the Valuation Office Agency website. The Royal Institute of Chartered Surveyors also operates a business rates helpline offering a free half hour consultation on business rates appeals: 0870 3331600.
Business stationery
This is another commonly targeted area. One common practice is the 'unfulfilled order'. The business legitimately supplies an order and, some months later, says it has made a mistake and there are some items still to be supplied. The unsuspecting business agrees to the offer of the remaining items and is also given some vouchers or another item to make up for the supposed mistake. When the goods arrive, they do not come with an invoice and are incorporated into the business. A short while later, an invoice for a huge amount arrives and the receiver, despite his protestations, is told to pay.
Rules relating to charities
Under the Charities Act 1992 and Charitable Institutions (Fund Raising) Regulations 1994, all charity-related publishing houses have a responsibility to provide prospective donors and clients with a 'solicitation statement'. This must set out what proportion of their donation will be used for charitable purposes, and has to be given during the course of any, and each, representation made by the publisher. It is an offence to fail to give this solicitation statement.
Where a 'donation' of more than £50 is made as a result of a telephone call, the fund raiser must issue a notice explaining which institutions will benefit and how, as well as providing full details of the right to cancel (this is usually included on the invoice). The donor then has seven days to cancel, at which point the donation must be refunded.