Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC Charges Slovakian Company with Deceiving Companies into Paying for Unwanted Directory Listings, (Mar 20, 2013)
Organizations Mentioned:Construct Data Publishers a.s.
By Tobias J. Gillett, J.D., LLM.
The FTC has filed a complaint in the federal district court in Chicago charging Slovakian company Construct Data Publishers a.s. with deceiving American businesses and non-profits into paying millions of dollars for unwanted listings in an online directory (FTC v. Construct Data Publishers a.s., FTC File No. 132 3001, Case No. 13 cv 1999).
According to the FTC’s complaint, Construct would send mailings to businesses and non-profits that had attended, or had registered to attend, various trade shows. The mailings would appear to be related to the event the recipients had attended, and would request them to update information purportedly contained in a directory of exhibitors. Only in fine print at the bottom of the mailing would the recipient learn that by returning the form they agreed to pay Construct “1717 USD” each year for three years for a listing in Construct’s internet directory.
After the recipients returned the form in the belief they were merely updating their listing in a trade show directory, Construct would send them invoices demanding the first $1,717 payment, usually well after the ten-day cancellation period had expired. Some would pay in the belief that Construct was affiliated with the trade show they attended. Those that declined to pay would receive late payment notices, with late fees added, and threats that Construct would seek to enforce its contract rights in court.
The FTC’s complaint, filed against Construct and two of its principals, alleges that Construct’s actions violated Section 5 of the FTC Act. The complaint seeks preliminary and permanent injunctive relief, an asset freeze, and redress of the injury to consumers. On March 15, 2013, the court issued a temporary restraining order and asset freeze.
Austrian authorities previously sued Construct for deceptive practices, causing Construct to move from Austria to Slovakia. Construct also agreed to stop soliciting businesses in the European Union in order to settle the case.
Companies: Construct Data Publishers a.s.
News: ConsumerProtection FederalTradeCommissionNews