Warning: Fair Guide update form may mislead
11 April 2007
New Zealanders are being warned about an Austrian company that is sending forms asking organisations to update their listing on the company's website "Fair Guide." The company targets organisations participating in trade fairs.
The Commission understands that a number of organisations have signed and returned the form without realising the small print commits them to a three-year advertising contract costing NZ $1,354 (US $981) per year.
The Commerce Commission is warning people to be cautious if they are approached by the company, Construct Data Verlag AG, or receive any communication relating to the website www.fairguide.com
The Austrian Advertising Council has twice ruled that the company's advertising practices are misleading and deceptive, and the Austrian competition authority has taken injunctions to stop the company's misleading conduct. The company has also been found guilty of fraud in Germany.
Commerce Commission Director of Fair Trading Deborah Battell said that the forms faxed to businesses and non-profit organisations seem to be specifically designed to create a misleading impression.
"In the Commission's view, these forms are very likely to mislead people into thinking they are approving a free listing, when in fact they are committing to a hefty three-year advertising contract," says Ms Battell.
"The company targets organisations outside of Austria, and threatens them with legal action in Austria if they do not pay for the advertising," Ms Battell says.
Ms Battell said the Commission had heard that the company uses a debt collection agency whose staff may become threatening and abusive when companies refuse to pay for the advertising they have inadvertently signed up for.
"Our message is, don't be bullied by these people," says Ms Battell.
Despite the company's threats, the Commission was not aware of any successful legal actions taken by Construct to recover money owing for the unwanted advertising, Ms Battell says.
Companies are likely to be approached because they are participating in a trade fair or exhibition, Ms Battell says. If they are approached in relation to Fair Guide they should notify the fair organisers, who can then alert other participants.
Fair Guideclaims to be "the largest fairs and exhibitions directory on the internet," although the Commission understands that none of the fairs listed on the website are affiliated with or endorses the directory. However, because Construct often approaches organisations close to the time of a fair in which they are participating, recipients often get the false impression that the "listing" is connected with their involvement with a particular fair. Fairs such as the ones at Mystery Creek, Autumn Home Show and EMEX have been targeted in New Zealand.