TELECOM Digest OnLine - Sorted: Court Halts Alleged Web Site Billing Scheme

Court Halts Alleged Web Site Billing Scheme

Grant Gross, IDG (
Fri, 08 Sep 2006 13:01:56 -0500

by Grant Gross, IDG News Service

A U.S. district court has ordered a halt to an operation that
allegedly added unauthorized charges to the phone bills of small
businesses and nonprofit groups for Web sites services that, in many
cases, they didn't know they had and didn't request, the U.S. Federal
Trade Commission (FTC) said.

Judge Kenneth Hoyt of the U.S. District Court for the Southern
District of Texas has approved a temporary restraining order halting
the activity and freezing the assets of a group of businesses and
individuals, the FTC announced yesterday.

The FTC's original complaint named defendants WebSource Media,
BizSitePro, Eversites, Telsource Solutions, Telsource International,
Marc R. Smith, Kathleen A. Smalley, Keith Hendrick, Steven Kennedy,
John O. Ring, and James E. McCubbin Jr. The agency filed an amended
complaint later, adding defendant WebSource Media LP, a successor to
WebSource Media LLC.

FTC's Accusations

The defendants illegally billed thousands of customers, according to
the FTC.

The operation was a maze of interrelated companies directed by the
people named as defendants, the FTC said. The operation used
telemarketers to make cold calls to small businesses and nonprofits,
and offered a "free" 15-day trial of a Web site design. The customers
were told there was no charge or obligation and that the Web site
would be cancelled automatically if it was not approved by them.

Whether the customers agreed or not to be billed after the trial,
their phone bills were often charged. When consumers called to dispute
the charges, the operators told them they had "verification
recordings" of an employee authorizing the charges.

The FTC said the operation is typical of fraudulent Web cramming
operations -- by using sales pitches to employees who frequently lack
authority to make commitments for their employers and failing to
effectively notify consumers that a Web site has been set up. The
operators repeatedly changed the names of their companies to avoid
detection by telephone companies they rely on to bill consumers and to
evade scrutiny from law enforcers, the FTC said.

Copyright 2006 PC World Communications, Inc.

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