Directory and register fraud

Commercial Information Centre (GWE): Current warnings

The Commercial Information Centre is a publisher, who currently sends particularly forceful demand notices and requests for payment. The German Protection Association Against Economic Crime (DSW) is taking legal action against this publisher.

Address book and register fraud

For several years, the number of dubious directory providers has been steadily increasing, circulating forged registration rates for corporate files, industry registers, central directories, commercial registers or similar directories as invoices. These are designed so that the casual reader thinks that they are invoices for an order they must have placed.
And often the company sending these publications will give the impression that a public body has sent the invoice as a supposedly legal requirement. Those most often targeted by such scams are mainly entrepreneurs and new companies whose addresses are taken from entries in the Commercial Register. Using such publications is legal and allowed. The Federal Gazette has made its advertisers aware of this in a statement, while stressing that it does not have any connections with the offers made by these dubious directory providers.
Another approach used by these scammers is using actual forms which are used by genuine companies in solicited advertising material. The casual reader recognises an old, familiar advertisement, but does not necessarily notice that his signature isn't just confirming the correct text of the ad (e.g. a proof copy for re-release), but is also signing for a new advertising contract with a completely different company.
The economic damage inflicted on companies by forming these unsolicited contracts is immense. If the directories appear at all, they are usually worthless because the entries are, for example, not sorted by sector or place of business.

How can you recognise untrustworthy directory providers from their advertising material?

  • The sales letter is similar to an invoice or bill, and usually completed transfer forms are already firmly attached to the letter.
  • The publications often use specific customer or registration numbers to give the impression of existing business relationships.
  • Logos or names are sometimes used, similar to those of authorities or semi-official bodies.
  • Deadlines and late fees: The payment deadline for fake invoices is usually between three and seven working days. Not infrequently there are threats of late fees in order to get the recipient to transfer quickly. The usual payment term of the official invoice should be 14 days.
  • Usually only the small print or terms and conditions on the reverse give an indication that this is a paid entry listing. Pasted excerpts from the commercial register publications in the Federal Gazette are frequently used.
  • Data entry forms are also sent, offering for the company's data to be recorded in a database - supposedly free of charge. However, only the publication of the so-called master data (company name, address) is usually free.
  • What is supposedly the company's certificate of incorporation is also sent.
  • The registration offers are often sent by fax. (Note: unsolicited fax advertising is anti-competitive)..
  • Advertising texts from other published advertisements - which were actually from companies with whom the reader had placed an order - are used in these forms The validity of an alleged proof copy should normally be confirmed in writing; in fact, it's merely a matter of signing an advertisement order.
As the examples show, the advertising methods take advantage of weaknesses within the organisation. The senders expect that the payments will be sent without closer examination, as the cost for registration in the directories is usually less than 500 Euros. Often, the fraud letter comes even before the official invoice from the local court, so that entrepreneurs transfer the amount in anticipation of an official invoice without further verification.

How to respond

How can you deal with these offers?
The IHK warns against responding to these offers. The right place for registration offers like those mentioned above is the wastepaper basket! Employees trusted to make payment transactions should therefore be made aware of the dubious practices of these scam directory providers.
It is particularly important in this context to examine the advertisements carefully, checking whether there really is a corresponding order process or if the service offered is really available.
The IHK has been trying for years to protect companies against dubious directory providers. The IHK has long been working with the German Protection Association Against Economic Crime e.V. (DSW) and the German Chambers of Industry and Commerce (DIHK) in combatting these companies.
At the IHK, incoming complaints are forwarded to the DSW. The Protection Association asks these dubious companies to submit a declaration to cease and desist, which will be enforced by a penalty, and if necessary shall bring prosecutions or possibly even criminal against them.

What should you do if you have already signed a contract?

In cases in which it is not clear that the offer requires a fee to be paid, the BGH has decided in a new ruling as of 26/7/2012 (ZR 262/11 Az. VII) that, no contract requiring a fee is concluded. If a benefit (in a crucial case the basic entry in a classified directory online) is offered free of charge, a compensation clause is not, according to § 305c Para. 1 BGB, an integral part of the contract, if the design of the form causes this clause to be so unnoticeable that the contracting partner of the company using it did not realise it was there.
If the addressee is given the wrong impression that there was an overriding obligation to make a payment, or he is misled about the framework conditions of the registry entry, such offers may infringe competition law according to the judgment of the Federal Supreme Court as of 26 January 1995 (AZ.:: I ZR 39/93). Unfortunately, this is not very useful to the person concerned, as the signed contract is thus not necessarily invalid. However, for those concerned, it is possible to dispute the contract immediately in writing on grounds of fraudulent misrepresentation pursuant to § 123 BGB. There is, though, the risk that the company may make a claim for payment, regardless of any appeal made by the person concerned. In doing so, however, there is a possibility that a court could end the contract later in the dispute, if the contract is effective but perhaps also effectively contested. A proposed draft for a declaration of rescission can be found at the end of this IHK information. Additionally, it can be checked whether the contract which was concluded on the basis of the form may also be illegal according to AGB, because preformulated terms which may be regarded as surprising in the sense of the Civil Code (BGB) (e.g. the hidden charges) can be considered ineffective.
Nevertheless, a termination of the contract should always be immediately declared as a precaution, to avoid the company sending subsequent invoices, having possibly shared the signature for multiple orders, or to avoid another extension to the contract.

What can you do if you have already made a payment?

If you have made a payment in the false belief that you owed money due to the forged order form, you should immediately stop any unexplained payments coming from your bank account. If it's already too late for this step, the amount should be reclaimed with legal counsel. In any case, the scammed customer should dispute the unsolicited order in writing for fraudulent misrepresentation (see the model below). According to the BGH, a challenge is considered valid due to fraudulent misrepresentation by those who signed and paid the form erroneously (see the ruling of 22 February 2005, Az. X ZR 123/03). In fact, in order for those making a refund claim to be successful, the court must approve the sender's intent to deceive.

Nevertheless, a termination should always be declared as a precaution, to avoid the company sending subsequent invoices, having possibly shared the signature for multiple orders.
Insofar as the form can be seen as deliberately deceptive, which may lead to pecuniary loss, the offence is also punishable by law. The advertisement should then also be passed on to the police because of (attempted) fraud.

Model of an appeal

Please note: Since the forms are arranged differently, the subsequent model contains different alternatives from which you can select whichever is appropriate for your case! Likewise, the text differs according to whether a payment has already been made or not.

MODEL

Dear Sir or Madam,
(If applicable: As I was under the impression that I was obliged to make a payment to you, I have paid a total of... ... Euros. No working contract has been concluded with this payment.)
I hereby refute my statement of ... on grounds of fraud. With your form letter dated ..., you have given the false impression that this was an invoice with a payment obligation (alternatively: a proof) and not a contractual offer. This was not apparent without any further information. Furthermore, the indication of the cost was disguised in the rest of the text so that the reader is completely misled and therefore ignores the crucial part regarding costs.
(If applicable: I request you to refund the payments immediately, no later than ... to my account ....) As a precaution I will cancel the contract at the earliest possible date.
I expressly reserve the right to take legal action.

German version

MUSTER

Sehr geehrte Damen und Herren,
(Falls zutreffend: ich habe unter dem Eindruck einer Zahlungsverpflichtung den Betrag von ... Euro an Sie gezahlt. Mit dieser Zahlung ist kein wirksamer Vertragsschluss zustande gekommen.)
Hiermit fechte ich meine Erklärung vom ... wegen arglistiger Täuschung an. Mit Ihrem Formularschreiben vom ... haben Sie in arglistig täuschender Weise den Eindruck vermittelt, es handle sich um eine Rechnung mit Zahlungsverpflichtung (alternativ: einen Korrekturabzug) und nicht um ein Vertragsangebot. Der Angebotscharakter war nicht ohne Weiteres erkennbar. Hinzu kommt, dass der Hinweis auf die Kosten derartig in den übrigen Text eingebettet war, dass der Leser geradezu verleitet werden sollte, den ausschlaggebenden Teil in Bezug auf die Kosten zu überlesen.
(Falls zutreffend: Ich fordere Sie auf, die von mir geleisteten Zahlungen unverzüglich, spätestens bis zum ... auf mein Konto ... zurückzuerstatten.) Rein vorsorglich kündige ich den Vertrag hilfsweise zum nächstmöglichen Zeitpunkt.
Rechtliche Schritte behalte ich mir ausdrücklich vor.
As at: April 2015