Construct Data Publishers a.s.

The commitment was in the fine print

Construct Data Publishers, trading as Fair Guide, mailed small retailers, home-based businesses, local associations and other trade show exhibitors a form that looked like a routine request to check the accuracy of their entry in an “exhibitors directory” for a show they had attended or planned to attend.

The form said their basic information had been listed for free and asked them to confirm or correct it. Buried in fine print at the bottom was a statement that signing and returning it meant agreeing to pay $1,717 per year for three years. Often the person who returned it was not even authorized to sign contracts for their employer.

Long after the 10 day cancellation period had expired, an invoice arrived demanding $1,717 be wired to a Slovakian bank account. Anyone who challenged it was told the order could not be cancelled. Late payment notices and late fees followed, along with threats of damage to their credit and lawsuits. Many paid simply to end the harassment.

The concealment

The defendants disguised their Slovakian location by hiring a company in Naperville, Illinois to print and post the letters, with a prepaid return envelope addressed to a Chicago-area PO box. Mail arriving there was forwarded to Slovakia.

This was not their first encounter with regulators. Courts in Germany and Italy had already entered orders against the company. In 2007 it agreed to stop its deceptive solicitations in Europe to settle a suit by an Austrian trade association, then moved from Austria to Slovakia in 2008 and continued, targeting the United States instead.

The judgments

A federal court in Illinois froze the defendants’ assets in March 2013 and entered a default judgment in February 2014, with a $9.1 million judgment based on the consumer losses caused by the scheme. That default judgment was vacated in December 2014, the same month the U.S. Attorney for the Southern District of Illinois indicted Wolfgang Valvoda on mail fraud charges.

The civil case ended in 2016. Construct Data Publishers defaulted after filing for bankruptcy in Slovakia, taking a $7 million default judgment including the transfer of $344,000 to the FTC from the court’s registry. Valvoda and Susanne Anhorn took judgments of $2.1 million and $4.5 million, suspended on payment of $200,000. All are banned from the business directory business.

In March 2017 the FTC mailed 974 checks totaling more than $535,000, returning about 24 percent of what each organization had lost, an average of $549.37.

What is not established

The stipulated order against the individuals resolves allegations without any admission or finding of wrongdoing.