Under the settlement the company will drop its pending claims
against consumers for disputed bills that total $17 million.
Another $22 million in bills may be cancelled if these are
challenged by consumers.
The FTC took action against Alyon and its owner, Stephane
Touboul, in May 2003, alleging that they illegally billed and
collected fees for videotext services – which it defines as "visual
(and in some instances audio) information and entertainment
services offered over the internet through individual web sites."
Since then, 16 state attorneys general have filed similar charges
against the company.
The FTC complaint accused Touboul and Alyon of downloading a
modem-dialling program onto consumers' computers, allegedly after
consumers clicked on a button to agree to the terms and conditions
for such a download.
The dialling program then disconnected consumers from their own
ISPs and reconnected them to the defendants' network. The
defendants captured the telephone number used by the modem and
matched it against databases of line subscriber information.
According to the FTC, the line subscribers identified as
responsible for the captured telephone numbers later received bills
charging them $4.99 a minute for each minute the defendants claimed
videotext services were purchased, regardless of whether the line
subscribers authorised the purchase.
The FTC said that many consumers never visited the defendants'
sites at all, and were charged due to billing service errors of
which the defendants were aware. Other line subscribers were billed
because a child or someone else in their household accessed the
services without the line subscriber's authorisation.
The FTC also alleged that the defendants' dialling program at
times downloaded onto consumers' computers without their
authorisation, and that the defendants failed to follow provisions
of the Pay-Per-Call Rule that provide a mechanism for consumers to
dispute charges for "telephone-billed purchases."
Monday's settlement also bars Alyon from billing consumers
without first giving them notice of all material terms and
conditions of the offer and getting their express, verifiable
authorisation to receive and be billed for the videotext services.
It requires that Alyon monitor the practices of its videotext
service providers to assure they comply with those conditions and
disclosures.
In addition, the settlement bars Alyon from representing that a
consumer who is being billed owes money unless the consumer is an
adult; the consumer received clear and conspicuous notice of all
material terms and conditions of the offer to access videotext
services; and the consumer provided express, verifiable
authorisation to receive and be billed for the videotext
services.
The settlement also bars Alyon, and any videotext service
providers with which it does business, from blocking consumers'
ability to read the terms and conditions of service; plant spyware,
viruses, or other unnecessary software on consumers' computers;
block consumers' ability to remove a dialler program or disconnect
from the videotext service; fail to disclose how billing charges
are calculated; or download modem-dialler software without
consumers' authorisation.
Finally, the settlement also bars the defendants from violating
the Pay-Per-Call Rule.
"The Order clearly confirms what we've been saying all along –
that Alyon's practices were never determined by any court or the
FTC to have been improper in any way," said Alyon's owner, Stephane
Touboul. "In fact, the settlement contains language affirming that
neither Alyon nor I admitted to any wrongdoing and that we
specifically denied each and every claim and fact contained in the
government's complaint."
