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Firm to settle Net porn scam
WASHINGTON (Reuters) - A California billing firm has agreed to give up $1.6 million to settle charges that it improperly billed thousands for Internet pornography, the Federal Trade Commission said this week. Privately held billing firm Integretel Inc. and its subsidiary eBillit prompted thousands of complaints in September 2000 after they placed charges of up to $4,000 on consumers' home telephone bills without their knowledge. Consumers incurred the charges after visiting a Web site run by British firm Verity International Ltd. that offered pornographic movies, the FTC said. Notification of charges buriedVisitors were instructed to download special software which unplugged their Internet connection and routed it through the African island nation of Madagascar at a rate of $3.99 per minute. Notification of the charge was buried in a series of 11 screens, said FTC attorney Lawrence Hodapp. Integretel placed charges averaging $127 each on consumers' long-distance phone bills, even if the person on the phone bill was not the one who downloaded the movies. "There was no effort to determine who was making those calls," Hodapp said. Pursuing the caseConsumers who contested the charges were told that they were legally obligated to pay when that was not the case, he said. Integretel agreed to give back all the money it collected on behalf of Verity. The money will be placed in an escrow account while the FTC pursues its case against Verity. If Verity is found guilty, the money could by returned to consumers, Hodapp said. No billing without consentIntegretel did not admit guilt as part of the settlement but will no longer handle telephone billing unless it obtains explicit consent from the consumer. In a written statement, the company said its relationship with Verity was limited to a few weeks in 2000 when it handled billing and customer service. "The companies played no role in selling or delivering (Verity's) services to consumers," Integretel said. In addition to the unfair-billing and deceptive-disclosure charges, the FTC has alleged that Verity overcharged consumers because the calls which were routed through Madagascar ultimately ended up in London, where connection fees are only 8 cents per minute. Copyright 2002 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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