Eamon Gilmore (Dún Laoghaire, Labour)

This issue concerns a scam that was the subject of an article by Neil Callanan in The Sunday Business Post on 30 January 2005. The scam is operated by an outfit called European City Guide, based in Spain. European City Guide sends a form to unsuspecting small businesses, such as professionals, charities, galleries and schools. The form appears to be one that requests an update of contact information, such as current address, telephone and e-mail. When the unsuspecting recipient signs the form and returns it, European City Guide claims this represents an order for an advertisement on a CD-ROM guide and relies on small print on the form to support this claim. The victim of the scam cannot withdraw from the so-called order and European City Guide uses debt collectors to demand payment. Initially this sum is for €800-1,000 but increases as time goes by. I understand some victims have bills for several thousand euro.

The scam is operating on a European basis. European City Guide used to operate from Barcelona before the Catalan authorities, acting on 3,500 complaints from Europe, prosecuted the company and fined it €300,000 in 2002. It now operates from Valencia and has engaged debt collectors called Premium Recovery, based in Switzerland. A web-based campaign against European City Guide has, until now, advised victims not to pay. However, the Ministers for Justice, Equality and Law Reform and Enterprise, Trade and Employment must give their urgent attention to a new development. Debt collectors for European City Guide are now threatening victims that they will use provisions of the European enforcement order legislation, in effect since November 2005, to force victims to pay. The European enforcement order legislation allows court orders made in one member state to be legally enforced in another.

The advice to victims has changed somewhat since this development. European City Guide can apply to the court in Spain and, if the case is not defended, easily obtain a certificate stating the company is owed a debt. This is sent to the High Court Registry in Ireland and I understand the Master of the High Court may be obliged to enforce the order. Small businesses faced with demands for extortionate payment from the company may find that an order granted in Spain may be enforced in Irish courts.

For victims of the scam, the alternative is to instruct a solicitor and defend the case but this costs a considerable amount. The European enforcement order was never intended to allow scamming companies to engage in cross-border fraud to extract money from small businesses. European legislation offers no protection to businesses and we need new or amended legislation to stop European City Guide operating and to protect its victims.

Hundreds of small businesses and professionals may have already been stung. Until now, they did not have to pay but the European enforcement order legislation may have changed this. I ask the Ministers concerned to see how this can be addressed. I will return to this subject when the Ministers have had the opportunity to examine the case fully.

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