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May 12th, 2008
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Directory scheme traps businessesFive companies are now in litigation against Swiss firmBy Paul Voosen Staff Writer, The Prague Post November 29th, 2006 issue
It starts with the whir of a fax machine, the opening of an envelope or a knock on the door at the end of a long business day. You're presented with a simple form, reading "European Internet Register" across the top in bold type. At first glance, the form appears to offer a free update to one's business's listing in a Europe-wide directory. But, in carefully worded fine print at the form's base, it becomes clear that, by signing and sending the form back to the publisher Swiss-based Intercable Verlag you are entering into a contract to purchase three editions of a business directory, at a total price of 2,070 euros ($2,670/57,774 Kč). Repeated invoices soon follow, putting pressure on the business to pay, and litigation may be threatened. Five Czech companies that say they were duped by these forms into entering contracts with Intercable Verlag are now fighting back, contesting lawsuits brought against them in Czech courts by Intercable. These cases are currently being heard or under appeal in regional courts, some the culmination of years of dispute. "Anyone that does not want our paid services returns the form unsigned," said Adrian Wittmer, Intercable Verlag's managing director. "It is general business practice to read what one signs; consequently, the signee cannot be misled." Some 1,500 Czech companies or nonprofits have paid Intercable after signing its forms, says one law firm investigating Intercable. Sixty-one-year-old Bob Peppett, a British businessman whose Czech-based furniture company, Brastan, signed an Intercable form in March 2004, is now fending off an Intercable Verlag lawsuit against his company for failure to pay. Peppett still has a photocopy of the original signed agreement, kept in a phonebook-size black binder of invoices, e-mails and faxes he has collected, the fruits of several hundred hours of research against the company. "This form may look primitive, but it just stays in the bounds of legality." When his company received the first invoice from Intercable in April 2004, Peppett faxed back a terse response reading, "This order is not genuine. Please cancel, as we will not pay." He then told his staff to throw out any subsequent invoices, thinking there would be no follow through. He was wrong, and Intercable continued to contact Brastan with invoices and eventually letters from management. Peppett was urged by a nervous staff to act, and so he went to the Internet. There he found a sprawling community of businesspeople from across Europe, including other Czech companies, who felt that they were victims of Intercable's directory scheme. He began contacting Swiss and European authorities. Intercable Verlag's Wittmer said he does not understand why Peppett is trying to destroy his business in the Czech Republic. Wittmer tried to come to an understanding with Peppett, he said, but now they must let the courts decide the dispute. Intercable has also filed a slander suit against Peppett, to be heard in January. "We get a lot of complaints about these types of scams," said Katie Carroll, spokeswoman for the European Advertising Standards Alliance (EASA). The largest number of complaints have been against two companies, European City Guide and Construct Data Verlag. The practices of both companies, based in Spain and Austria, respectively, are similar to those of Intercable Verlag. All three companies may in fact be owned or influenced by the same man, German businessman Meinolf Lüdenbach, said Christian Bütikofer, a Swiss journalist who has investigated Intercable and related companies over the past year for the newspaper Tages-Anzeiger. The Swiss government is aware of the controversy Intercable and similar companies based within its borders have caused. It has issued warnings against the businesses. Swiss police raided the offices of Intercable Verlag June 20, spurred by the State Secretariat for Economic Affairs (SECO); the raid was an expansion of an investigation into three other companies begun the previous year. Guido Sutter of SECO confirmed the investigation of Intercable Verlag but declined to comment further on related cases now before the Swiss courts. "The Czech Republic is very popular for Intercable, as are Poland and Slovakia," said Bütikofer. "The particular trick with Intercable is that it works with people," he said, using freelance sales representatives who approach institutions in person. This is unlike any other directory scheme Bütikofer knows of. The law firm IMG has been following Intercable's activities in the Czech Republic after it, too, signed an agreement with the company. According to its research, 60 percent of the Czech organizations that have signed agreements with Intercable which include schools, hospitals and town halls were approached in person by sales representatives. Receptionists and assistants would then sign Intercable's forms, with the contracts going to five years in length at 1,290 euros a year. Unlike Brastan, IMG did not receive an invoice from Intercable until a year after the first form was signed. A lawyer from the company who declined to be named attributed this delay to Article 23 of the Swiss Code of Obligations, which allows one year for a contract to be challenged if one party feels deceived. To this point, IMG has received only invoices from Intercable and has not been sued. Other companies have not been so lucky, and Intercable has suits open against five different firms. One suit, against CS International, is now in appeal, and, according to IMG, CS International has a great chance to win. Even if the suit is won, under the Czech judicial system, this does not establish a precedent in the Anglo-American sense. Intercable could still win related suits. CS International declined to comment on the case. The day before Brastan's case was to go to trial, Nov. 23 in Ústí nad Orlicí, east Bohemia, Peppett predicted that the case would be adjourned, based on an excuse raised by the prosecution. Such an adjournment would perfectly match Intercable's tactics, he said delaying the case is one more way of pressuring him to settle. The next day, the court adjourned Brastan's case. Naďa Černá contributed to this report. Paul Voosen can be reached at pvoosen@praguepost.com Help us improve The Prague Post - fill out our Reader's Survey. Other articles in Business (29/11/2006):
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Reader's comments:
add your commentLinks to some articles and a website:
- ADRESSEN, DIE INS GELD GEHEN
by Aureliusz Pedziwol/Prag
tagblatt.ch, 16.2.2006
http://www.tagblatt.ch/index.php?artikelxml=xxx&artikel_id=1150646&ressort=tagblattheute/wirtschaftTagblatt Heute
- KRIPO BESUCHT ZUGER WEB-VERLAG
by Christian Bütikofer
Tages-Anzeiger, 9.10.2006
http://tagi.ch/dyn/digital/hintergrund/674588.html
- STOP Intercable Verlag AG
http://www.stopecg.org/intercable.htm
- Stop The European City Guide!
http://www.stopecg.org
And also:
http://www.google.com/search?q=Intercable+Verlag
Zurich
london
I am absolutely shocked to read all about it. My case is still in very early stages as I have only just received their first "surprise" invoice. We are honest, hard-working people and have never refused to pay our bills, but I will go to prison in Switzerland before I pay this one.
Wales
Lille
HKBDL has put four firms to Small Claim Tribunal & HKBDL was sucessfully to persuade two firms settle before the SCT, now, there's two firms to fight against HKBDL, of course, this two firms do not alone cos they have more than 300 victims are standing behind them, they are sitting at the same boat.
Singapre has the same branch HKBDL & many victims are there too.
Hong Kong
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