The owners and operators of playgirl.com, highsociety.com and
scores of other adult web sites have been charged by the US Federal
Trade Commission with illegally billing thousands of consumers for
services that were advertised as free, and for billing other
consumers who never visited the web sites at all.
The FTC and the New York Attorney General have taken court
action in New York to halt the illegal billing practices and have
asked the court to freeze the assets of the responsible companies
pending trial, to provide for consumer redress.
New York City-based Crescent Publishing Group, its owner, Bruce
Chew, and David Bernstein, are named in the federal court complaint
detailing the charges, along with 64 affiliated corporations that
operate the adult entertainment web sites.
According to the complaint, the "Free Tour Web Sites" generated
income of $188 million between 1997 and October 1999 - $141 million
of which was generated in the first 10 months of 1999 alone.
The web sites claim that consumers' credit card numbers are
required solely to prove that the consumers are of legal age to
view the adult material, and that the credit cards will not be
billed. But thousands of consumers were charged recurring monthly
membership fees ranging from $20 to $90, the complaint says.
The FTC said this week that: “Consumers who tried to dispute the
charges were met with a variety of barriers designed by the
defendants to thwart their efforts.” According to the complaint,
the defendants use billing names different than the names of the
Web sites, so consumers often had no idea who was billing them or
why. Moreover, consumers often had difficulty the contacting anyone
to get refunds from information provided to them on their billing
statement.
The FTC and New York Attorney General According claim that the
defendants routinely change corporate billing names and merchant
banks in an attempt to avoid the fraud detection systems of credit
card organisations such as Visa.
