Consumers Billed International Long Distance Charges to Access "Free" Pictures
A Web site operator who advertised free membership, then connected consumers' computers to her server using a "dialer" program that disconnected them from their Internet Service Provider and reconnected them through long distance calls to Madagascar, has agreed to settle Federal Trade Commission charges that her scheme was unfair and deceptive and violated federal law. The settlement bars the defendant from billing consumers without express, verifiable authorization; selling or providing dialer programs to others; making false or misleading statements in advertising or during the sale of products or services on the Internet; and using aliases when registering Web sites. The settlement also requires that she give up $10,000 in ill-gotten gains.
On November 18, 2000, the FTC filed suit in U. S. District Court for the District of South Carolina, Charleston Divison, alleging that Hillary Sheinkin operated adult Web sites that advertised themselves as free and claimed "no credit cards needed." But when consumers accessed her sites, a dialer program redirected their computer connection to an international telephone number to access the adult images on the sites. Consumers later received telephone bills carrying expensive, international long-distance charges they had not authorized. The FTC alleged that the defendant unfairly billed consumers who had not authorized charges; falsely represented to consumers that they were legally obligated to pay for the services, whether or not they purchased them; engaged in false and deceptive claims that access to the adult content was free and that through her "Witchy's Web" videotext business opportunity, where she offered to sell her dialer program, she provided others with the means and instrumentalities to engage in deceptive practices that violate federal law.
The settlement will bar the defendant from placing charges on consumers' telephone bills without having express, verifiable authorization for the charges. It also prohibits her from advertising, promoting or offering to sell any dialer program that does not require consumer confirmation that charges are authorized on a telephone bill. The settlement bars any false and misleading advertising, including, but not limited to, false claims that her online or chat services are free; that dialer programs are free; that line subscribers are liable for charges; and that consumers are legally obligated to pay for unauthorized charges. The settlement bars the defendant from using aliases to register Web sites and from using fake corporate names. In addition, the settlement calls for the defendant to give up approximately $10,000 in ill-gotten gains. The settlement also contains certain record keeping provisions to allow the FTC to monitor compliance.
The Commission case names Hillary Sheinkin, also known as Hillary Perse and Honey Smith, doing business as Witchy's Web, Inc., Honeybun, Inc., and Free Sugar, Inc.
The Commission vote to accept the proposed consent judgment was 5-0. It was filed by the Department of Justice at the request of the FTC and entered by the court August 15..
Copies of the Stipulated Final Judgment and Order are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
(FTC File No. X010013)
(Civil Action No. 2-00-3636 18)
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