Small businesses around Europe are being harmed by rogue traders who use unfair practices, such as misleading advertising.
The fraudsters hide behind national borders and exploit the vulnerability of companies – especially the small ones – when doing business in other EU countries. Professionals – such as doctors or lawyers – and civil society organisations can also be victims. To better protect them, the European Commission is launching a public consultation to gather more information from companies and others affected on the nature and scale of the unfair practices, including online scams. Following the consultation, the Commission will then assess how best to stop rogue traders exploiting loopholes in the rules and make sure that legitimate traders are effectively protected.
One common scheme is misleading directory companies. These firms send out forms to businesses asking them to update their details, seemingly for free. But once the victim agrees, they will be told that they have signed a contract and charged a significant yearly sum. A survey by the European Parliament in 2008 documented 13,000 complaints about company directory scams – thought to be just the tip of the iceberg. It found that companies were typically asked to pay €1000.
Companies often do not even report the unfair practices of which they are victims, because they lack time or do not know who to contact.
The Commission's public consultation will gather data from individuals, businesses and civil society. Following the consultation, the Commission will present in the first half of 2012 options for future EU action, which may include legislative changes.
The public consultation will run until 16 December 2011.