The most unscrupulous scams offer nothing in return for your money. Cleverly designed, tightly organised and often impervious to the law, they add up to a billion pound global industry.
Beyond (or beneath) the scam is another, similar type of practice. One that does offer something in return for your money, but misleads you in the process. Crafty, if only because it is difficult to even define the process as a scam.
For almost ten years, the European City Guide (ECG) - a directory of companies, activities and services - has offered businesses the chance to be listed in their guide. Thousands of companies took this opportunity - which appeared largely above board - only to find that as a result they had unwittingly entered into a legally binding contract. One which lasted several years and demanded further, unexpected payments.
In 1999 the Advertising Standards Authority upheld complaints that the ECG mailing was misleading, because it implied that directory entries were free and did not make clear that signing and returning the mailing would commit to subsequent payments. And according to the ‘Stop the ECG’ website, over 1,300 business would agree - all stating in a poll that when returning the ECG mailing, they did not believe they were entering into a binding contract.
So the issue here is not that the ECG takes money for nothing - there is a guide, and registered businesses are (usually) listed in it. The issue is that the ECG uses misleading tactics to trap people into making unexpected payments and entering into unintended agreements.
Sounds like a scam, surely? Well, probably. But the rub here is the grey area between a scam, and a legitimate, legally binding contract. So much so that in this case, it was ECG that were shouting loudest for their money, not the victims themselves. According to reports online, hundreds of businesses were hounded by bailiffs and court orders for money owed to ECG. In many cases, firms simply gave up fighting and paid out their contracts, for fear of being taken to court or damaging their credit status.
It may seem pedantic to make the narrow distinction between a scam and misleading marketing. Both exist to con you in some way or another. The difference is, misleading tactics may be employed not just by hardened scammers, but by otherwise legitimate companies delivering seemingly ‘real’ products and services. As a result, their tactics may be harder to spot than a traditional scam. And if you fall into the trap, it may be much trickier to escape.
Find out more about Misleading Advertising at the ASA website
http://www.asa.org.uk/asa/about/short_guide/
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