Arlene McCarthy, author. − Mr President, the clear objective of this oral question is to get action and redress for the thousands of small businesses across the EU which are being defrauded daily out of millions of euros by sham European ‘directory companies’. This Parliament has received hundreds of petitions and a mass of correspondence to our constituency offices from businesses who have fallen victim to these prolific scams against small businesses.

We must, of course, recognise that these scams have been in existence for over 40 years, according to the legitimate directory publishers represented by the EADP. But this is without doubt a scam which requires a European response. As an example, the structure of the Maiwolf holding company, which owns the European City Guide and other such companies, is a complex web of European scam companies registered, operating and domiciled in several Member States of the EU and in the EEA countries Switzerland and Liechtenstein. Despite legal action and fines issued by courts in several Member States, it continues to operate, making a mockery of EU cooperation on law enforcement. Indeed it took seven years through the courts for the company to be shut down in Barcelona, only for it to immediately restart trading in Valencia. Maiwolf Holding is a hub of a web of companies operating scams not just at EU level but at global level and continuing – I am afraid – to escape the long arm of the law.

By responding to the European City Guide, businesses were led to believe that they were simply responding to an information request or updating or correcting their data. They were led to believe it was a free service, and then suddenly they found themselves slapped with an invoice for thousands of euros which, if mentioned at all, had only appeared in very fine print in a confusing and misleading manner. The same Maiwolf holding company apparently also owns the debt collection companies which then proceed to harass, bully and threaten businesses to pay up. A website, ‘Stop the European City Guide’, that campaigns against the City Guide fraud, was also subject to legal threats and their ISP had to shut them down, although I am pleased to say that they are currently up and running again.

Many of the activities of this fraudulent company are clearly in breach of the Misleading Advertising Directive of 1984. We need better and more coordinated enforcement to close the loopholes or gaps which are exploited by such companies. I can inform the presidency that my committee will review the implementation and transposition of the Misleading Advertising Directive and, of course, the new Unfair Commercial Practices Directive. We are particularly interested in the example of Austria’s transposition of the Misleading Advertising Directive whereby businesses cannot be bound by a contract unless they have clearly and explicitly signed up to its terms and conditions. This is a model, Presidency, which I hope you will follow in discussions with the other Member States.

Small businesses, of course, are not helped by the Unfair Commercial Practices Directive as it does not cover business-to-business transactions – even for small businesses. Member States must make better use of the cross-border enforcement network to put these cowboy businesses out of business and out of operation once and for all. I certainly share with my colleagues here the sense of frustration of the many small businesses who for years, not months, have continued to suffer harassment and financial loss.

If we believe, as we say we do, that small businesses are the backbone of the EU economy, then it is time to stand up for them, to defend their rights and to defend them against these fraudulent practices. I certainly welcome Commissioner Kuneva’s interest and her commitment to monitoring their activities, but monitoring alone does not get results and does not actively target these companies. It is unacceptable, I believe, that the business complaints have fallen on apparently deaf ears and that the sole trader behind the City Guide has been allowed to continue to peddle his fraudulent practices without facing the full force of European law. So I am calling today on the Member States to urgently take action, to recognise the serious and damaging consequences of allowing this fraudster to continue to rip off our businesses. I want the Member States, and indeed the presidency, today during our debate, to commit to taking action, not just to debate the issues we have known about for many years.

So I urge the presidency to answer these questions and to work together with us to find a resolution for the businesses who continue to suffer from this fraud.