FTC Halts Trade Show Scam Targeting Exhibitors

At the request of the Federal Trade Commission (FTC), a scam targeting small businesses and nonprofits that attend trade shows has been temporarily halted by a federal judge, the International Association of Exhibitions and Events (IAEE) — whose members were among the scam’s targets — announced yesterday.

According to the FTC, the scam is the work of a Slovakia-based operation that allegedly sent mailers to U.S. trade show exhibitors, who were tricked into collectively paying millions of dollars to be listed in an online directory “in which they had no interest in being listed and for which they did not understand they would be charged.”

“The defendants send mailings to retailers, home-based businesses, local associations, and others who attend trade shows,” the FTC explains in a news release published last month. “The mailings mention a specific trade 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 trade show or exhibition.”

Allegedly, the mailings include a form stating that the recipient’s basic information has been listed in the directory for free, and instructing them to confirm its accuracy or make corrections on the form.

“The form falsely suggests that the parties have a preexisting business relationship and that the directory listing is related to the recipient’s participation in the named trade show or exhibition,” the FTC says. “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. Often, the person who returns the form is not even authorized to enter into contracts for their employer.”

According to the FTC’s complaint, recipients who challenge the invoice are told their order can’t be canceled. “Late payment notices follow, with late fees added, and some organizations pay just to end the harassment,” according to the FTC, which says it is “seeking to permanently halt the alleged scam and require the defendants to refund the fees.”