The Advertising Standards Authority (ASA) on Wednesday criticised GC Logic Ltd, a London-based company, for sending a mailing that misleadingly implied that companies owed money for having their details listed on the Internet.
GC Logic sent letters and invoice to firms asking for £49 to be included on its business directory, internetnoticeboard.com. It said the payment was due as the free trial period of 30 days had elapsed.
A Cheshire-based business which received the mailing complained to the ASA saying that they had not subscribed to a free trial for the advertisers' service.
GCLogic admitted to the ASA that the recipients of the mailing had not subscribed to a free trial for its service. Instead the company had used contacts from a third-party database it had bought from an Indian company.
The company said it had chosen this marketing approach as it was "a new company with a minimal budget".
The ASA stated in its adjudication that the company has acknowledged that this was the wrong approach and has agreed to stop using that database for marketing.
"The Authority noted the advertisers had admitted that recipients of the mailing were not subscribers to their service," said the ASA in its ruling.
"It was concerned that the mailing postured as an invoice and concluded that the mailing misleadingly implied the recipients owed money."
The watchdog will take no further action at present, but if GC Logic continues to offend it could refer the company to the Office of Fair Trading which has the power to take legal action.
GC Logic is not the only company to have had been criticised by the ASA in the last few weeks. At the end of August the ASA reprimanded Microsoft over its advertising campaign which claimed that Linux was 10 times more expensive than Windows.