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I have recently been encountering an organisation whose mode of operation is to dupe members of venue staff into "agreeing" to have their venue advertised "online". Subsequently a bill arrives for this service.

The initial conversation typically starts along the lines of "we advertise [xyz] online and we are ringing to update the details". The confirmation of details is interpreted by the seller to be a verbal contract. I have one instance of where "we advertise [xyz]" was a complete lie. Other cases are a bit greyer, for example one listing is there with details that appear to date back to the previous ownership of the venue (though I suspect that they never paid the bill when it arrived either).

When the bill is ignored, they use a London-based harassment service to start sending official-looking letters. This service advertises that it will "send a carefully crafted series of letters prompting payment directly to the supplier". The letter states that the debtor should not reply to it and instead direct all correspondence to the creditor.

I have personally taken some of the phone calls, from three different websites that are using this tactic. All are registered to the same individual. I even spoke to one guy who claimed to be a debt collector when I clearly recognised his voice as being from one of these websites.

What aspects of this operation are illegal? Could any of these verbal agreements be enforceable?

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  • One thing to watch out for is what they get you to say; if, at any time in the conversation, you say "yes" or "I agree" or any other sort of affirmation, some particularly unscrupulous scammers will then splice together a falsified recording to make it sound like you agreed to the charges. See the FCC's alert about the "Can you hear me" scam.
    – Doktor J
    Commented Feb 9, 2018 at 3:15

5 Answers 5

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Given that this is a UK based company, the most applicable Act would be the Unsolicited Goods and Services Act 1971

A person who, not having reasonable cause to believe there is a right to payment, in the course of any trade or business makes a demand for payment, or asserts a present or prospective right to payment, for what he knows are unsolicited goods sent (after the commencement of this Act) to another person with a view to his acquiring them [for the purposes of his trade or business], shall be guilty of an offence and on summary conviction shall be liable to a fine not exceeding level 4 on the standard scale.

This law specifically refers to

[unsolicited] charges for entries in directories.

You also mentioned that they're misrepresenting that a company is already a customer and sending out invoices on that basis. That would be a breach of the Fraud Act 2006

A person is in breach of this section if he dishonestly makes a false representation

As to their enforceability, that answer is no. If this came before an actual judge, the judge would throw it out in a heartbeat. No agreement was made to provide a service in return for a payment and these companies rely on sending threatening letters via (seeming) third-parties precisely because they wish to avoid that level of scrutiny.

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  • Thanks for citing some relevant law. I think it's 0% chance they could take action against us but also I don't think I could put together enough concrete evidence to put a case against them either. Might be fun mentioning these laws when I contact their domain registrar and hosting provider though (not to mention the ICO??)
    – Rodney
    Commented Feb 8, 2018 at 13:00
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    @Rodney - You should also contact the police even if there's not a sufficient case to answer, it goes to build a picture
    – Richard
    Commented Feb 8, 2018 at 13:31
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    Accepted answer after reading the Unsolicited Goods and Services Act 1971
    – Rodney
    Commented Feb 9, 2018 at 11:57
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    The trading Standards department at your local council should also be able to help. It is what they are there for and your report will help.
    – Philip Oakley
    Commented Feb 9, 2018 at 15:52
  • In the United States, most states have a state Attorney General's office, which frequently has an Office of Consumer Affairs or a similar office which is responsible for taking complaints about practices such as this and investigating them. While you may not have enough evidence to privately pursue action or for local law enforcement to pursue action, frequently these people are able to be investigated and prosecuted because of their patterns of behavior. Is there such an office in the OP's jurisdiction?
    – Deacon
    Commented Feb 9, 2018 at 16:57
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In the USA, when a creditor tries to collect a debt, the presumed-debtor may demand proof that they actually owe the debt, and that the creditor holds the debt.

This can be satisfied by signed contracts, which in the case you describe, would not exist.

Detailed, complete phone recordings may also establish proof of the debt. But again, in the situation you describe, honest, unedited recordings would probably vindicate the "customer/debtor".

I suspect that the UK has similar laws regarding debt collection practices.

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What aspects of this operation are illegal?

As described, none of it is legal, it’s a scam. The crime is fraud.

Could any of these verbal agreements be enforceable?

No.

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    Verbal contracts are enforceable (with difficulty), but the conversations as described don't amount to contracts.
    – Mark
    Commented Feb 8, 2018 at 2:26
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    @Mark: Considerably less difficulty if they were recorded, of course, but it hardly matters when the operation is a scam.
    – Kevin
    Commented Feb 8, 2018 at 4:39
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    You could say a lot of things are scams, but that it is not a convincing legal argument, unless 'scam' has a defined legal meaning somewhere and you can show that the 'contract' was indeed one.
    – Brandin
    Commented Feb 8, 2018 at 8:24
  • @Mark - You mean, "oral contracts", as in, "Oral contracts are not worth the paper they are printed on."
    – Jive Dadson
    Commented Feb 9, 2018 at 2:59
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    @JiveDadson oral contracts are very common and very enforceable - I just bought a Pepsi using one. They are hard to resolve disputes about them however.
    – Dale M ♦
    Commented Feb 9, 2018 at 4:54
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No contract has been formed, since the buyer in this case never agreed to be bound to a service contract.

Simply ask any debt collector for proof of the debt owed. If they are unable to provide evidence it is relatively easy to swat them off with threats of reporting them for harrassment etc.

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  • Although this is not untrue, it doesn't answer the question of their legality
    – Richard
    Commented Feb 8, 2018 at 12:02
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The general underlying idea is that contracts are based on a mutual agreement and that contracts like this (“scams”) based on the bad faith of one party are not actual agreements since one can only truly agree to the known and not to offers based on secret (i. e. deliberately or negligently concealed) intentions of the party making the offer. Most if not all legal systems try to protect the party acting in good faith and discourage such contracts through various remedies. E. g. in Civil Law such contracts can be declared void by a disputing party on that ground and the party responsible for the cause of the lack of agreement (i. e. the one acting in bad faith) is liable for damage caused by it.

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