WASHINGTON, D.C. - A federal judge has temporarily halted a Slovakia-based operation that allegedly tricked small businesses and non-profit organizations into collectively paying millions of dollars to be listed in trade show directories not affiliated with the events in question. The companies had no interest in being listed and did not understand they would be charged, federal authorities say.
The U.S. District Court for the Northern District of Illinois-Eastern Division issued the temporary restraining order and asset freeze on March 15. To read the order, click HERE.
The judge acted upon request of the Federal Trade Commission, which is seeking to permanently halt the alleged scam and require the defendants to refund the fees.
Dealer Expo show management has repeatedly cautioned its exhibitors of fraudulent directory solicitations, activities which date back several years.
Although the FTC's recent actions are against organizers based in Slovenia, Dealer Expo's advisories have targeted similar operations originating from other countries as well, including Mexico.
"These companies are not in any way affiliated with Advanstar or Dealer Expo. Use of Advanstar's event names and trademarks by these companies in their solicitations is unauthorized," said Lorri Monty, operations director for Dealer Expo.
According to the FTC, the defendants send mailings to businesses, associations and others who attend or exhibit at trade shows. The mailings mention a specific show or exhibition, and are designed to appear as though they are merely asking the recipient to update and check the accuracy of information for the "exhibitors directory" for the named event, like Dealer Expo. The mailings include a form stating that the recipient's basic information has been listed in the directory for free, and instructs them to confirm its accuracy or make corrections on the form.
The form falsely suggests that the parties have a pre-existing business relationship and the directory listing is related to the recipient's participation in the named show or event, the FTC said.
"Many recipients do not notice a statement, buried in fine print at the bottom of the form, that by signing and returning the form they agree to pay the defendants $1,717 per year for three years," the FTC said. "Often the person who returns the form is not even authorized to enter into contracts for their employer."
According to the FTC complaint, long after the form is signed and returned and the 10-day cancelation period has expired, the defendants send an invoice demanding payment of $1,717 to a Slovakian bank account. Those who challenge the invoice are told the order cannot be canceled. Late payment notices follow with late fees added. Some organizations pay the bill just to end the harassment, the agency said. (continued)