Advertisement fraud….sóóóó 2012?
Advertisement fraud was very relevant some years ago. Companies all over the place reported to be tricked by a company dealing in vague advertisements in unknown magazines.
After some years of relative silence, this problem seems to pop up again. This is the reason for writing this blog: to prevent you and your company to become a victim of this phenomenon. To give you a proper view, first a summary of what has happened to other victims of this scam:
How does such a conversation go?
At a busy hour of the day a company will call, acting as if it has been your advertisement intermediate for years. This person asks if this service can be expanded with more or bigger advertisements. When victims respond surprised (‘but I do not advertise in that magazine right…?’), they are told that they can easily end it at the end of the term, by simply signing the fax that would be sent.
Quickly sign a fax
The employee, busy and not entirely informed of all advertisement activities of the company, only thinks one thing: damage control. Under pressure, the received (often unclear) fax is signed, thinking that this would save costs. ‘Problem solved’, these people think.
Whoops.. a new agreement
Nothing could be further from the truth: signing the fax means signing a new agreement! Because of the pressure, the small print of the agreement is not read. The customer thinks he or she signed a fax that said ‘NO RENEWAL AFTER THIS’. In reality the small print mentions that the parties have agreed upon a new agreement by signing it (that is not renewed after the term).
Fraud or a smart trick?
Fraud would be a reasonable reaction, when reading this story. In fact this appears to be an illusion if we read the case law in this area. Judges look at such cases strictly legally. Companies are considered professionals and a certain measure of professionalism and attention is expected from them. This means that they are expected to carefully listen to what is said at the phone and do not just sign an agreement without reading this properly. If someone signs this agreement in the end, this person is expected to know what he or she has signed and thus has entered into the agreement voluntarily.
Although this works differently in reality – what is proven by the large amount of cases -, judges are not sensitive for this point. What contributes to this is the fact that most of the time only the agreement and the statement of the employee are available as proof: a sound recording of the conversation can hardly ever be handed over. This makes it impossible to prove what was said in the conversation.
Advice for your employees
Discuss the content of this blog with your employees. Define clear rules on who is and who is not authorised to enter into such agreements. Arrange this also properly in the public registries, to assure that companies can know who is and who is not authorised to sign agreements. Never let someone sign an agreement in a rush. Always ask them to discuss it with a colleague or manager. Read the agreement carefully. Something that could help is to attach an accompanying letter with a summary of the (phone) conversation and to mention that these are the circumstances under which the agreement was signed. This confirms the intentions of both parties in writing.
Should you still sign a document that you should not have signed, make sure to be advised properly. Do not settle immediately (an often used way to still ‘earn’ some quick money). If you have a question or if you suspect to have been a victim of fraud, contact me, Suzanne van Dijsseldonk LLM.