Commerce watchdog to assess website listings business

By IRENE CHAPPLE

A new marketing tactic from online directory National Business Online may test the legal boundaries of unsolicited invoicing.

The Commerce Commission is looking into complaints about the practice after being alerted to the invoices being sent by the website.

An invoice sent to the Herald said a balance of $66.38 was due.

A note at the bottom said:

"You are under NO obligation to pay for this invoice until you view your free listing on our site ... and if you are fully satisfied and want to continue your listing with NBO. Otherwise please disregard this invoice and accept our apologies for the inconvinience [sic] we may have caused you."

Other businesses listed on the website and contacted by the Business Herald were unaware of their listings.

Maggie Lewis, a producer with the Sydney Film Company - which is affiliated with the Auckland Film Company - was surprised to learn the company was on the website.

Her company had not been invoiced but Lewis was unaware of the website and said "I feel it is our choice if our name gets put forward".

Invoicing a business which has not requested a product or service is called pro forma invoicing and is illegal under the Fair Trading Act.

It can catch businesses who do not check invoices.

Consumer magazine editor Simon Wilson says the practice has netted fraudsters hundreds of thousands of dollars.

Shallandra Singh, manager of National Business Online, said his lawyers advised him that the invoicing tactic was legal because of the disclaimer.

However, Deborah Malaghan, a senior solicitor at the law firm Russell McVeagh, said the practice was arguably misleading.

The offer was set out as an regular invoice and, despite the disclaimer, "it is not unforeseeable that a not-so-diligent person may simply pay the invoice without reference to the disclaimer", Malaghan said.

Singh said he was making an offer to companies and invoicing them at the same time.

He would not say how many companies had received the invoice but thousands are listed on the website.

Singh said the website had been live for almost two years and was owned by National Business Directory. The sole director is his mother.

The commission has received three complaints about the business in the past week. A spokeswoman said it would check to see whether an investigation should be launched.