"I go into a chat room and say, ‘Who would like to see me smoke a cigarette with my pussy?' And you'd be surprised how many guys respond. I usually hang out in Yahoo's ‘self-pleasure rooms.' The chatters think I'm female. It's just like phone sex - you don't know who you're chatting to," said Moe Muhammed, owner of Chat4CashOnline.com.
Muhammad said he doesn't see any conflicts of interest in his business, which he estimates consists of maybe 10 companies including his own.
"A ‘cam girl doesn't have time to go on Yahoo to chat with 50 guys online. So our fantasy chat operators go online and do that," he said. "Once people buy a membership on the site we send them to a real girl. The cam girl is not the same person as the chat person."
Men, including Muhammad, account for 15 percent of the 200-plus text chat operators who work for Chat4CashOnline.com. The company tries to get people to subscribe to GuerillaTraffic, Webcams.com, IMLive.com, and a few others.
"The ethical part in my opinion comes to the end result, once that person buys a membership - they can get a trial for $1, it lasts 30 days, and it gets them online and they have 30 days to cancel. What makes me feel comfortable is that after you're through chatting with them, they go on to a real female," said Muhammed.
The chat employees have the goal of two sign-ups per hour, although the average hovers around five to seven sales over a seven-hour period, said Muhammed. The company pays $20 to $25 per sign-up, depending on where the chatter lives.
"I don't think chat marketing is going to eat into affiliate marketing, because most of our customers are new to the Internet. Most perverts already know which sites to go to and where to get it for free and they're not going to pay for it," said Muhammed.
Are Text Chatters Breaking the Law?
"Right now, no law is specifically directed toward anything that chat marketing companies are doing," said attorney Clyde DeWitt.
"Say I'm a telemarketer named Bartholomew and I decide to call myself Bob because it's an easier name. I don't know of any regulation that prohibits that," said DeWitt. "But if what I'm trying to sell is Internet sex chat and if I am really Bob but I say, 'I'm Linda and this is my picture,' but it is a picture of some pin-up girl, that could be a legal issue."
The distinction has to do with whether the chatter's real identity would make a difference on whether a transaction would occur.
General regulations on unfair trade practices could apply to the chat marketing space should anyone in the legal profession decide to take action. Illegal activities, such as omitting 2257 disclosures regarding age documentation, would apply to chat marketing if, say, photos were included with the text, said DeWitt.
"This is another variation on an old theme of trying to get your product or service into an area and penetrate a market that hasn't been penetrated before," said Lawrence G. Walters, a partner at Weston, Garrou, Walters & Mooney. "There isn't a specific law I'm aware of related to chat marketing - it's too new of a thing for the government to have caught on to yet."
Federal and state laws prohibit deceptive marketing, which includes anything pretending to be something that it's not.
Sometimes text chat marketers present themselves as the stars appearing in content on pay sites when that's not the case. Other such chatters may pose as escorts.
"The general rule is that if it sounds deceptive, then it probably is," said Walters. "The Federal Trade Commission has been pretty aggressive about prosecuting deceptive marketing online - remember all the free stuff offered on the Internet has all been cracked down on. I wouldn't be surprised if the FTC starts looking at chat marketing."
These marketing techniques become problematic if they occur in chat rooms that have terms of service specifically banning the promotion of products and services within the online conversations. Violations of a site's rules can form the basis of a lawsuit.
Yahoo's terms of service state, "You agree that you will NOT use the Service to: impersonate any person or entity, including but not limited to an AT&T or Yahoo official, forum leader, guide, or host, or falsely state or otherwise misrepresent your affiliation with a person or entity."
The site's rules also ban stalking, harassment, and disruptions to the flow of conversations.
Even more relevant, Yahoo's terms of service include a paragraph for members to agree they won't "upload, post, e-mail, transmit, or otherwise make available any unsolicited or unauthorized advertising, promotional materials, junk mail, spam, chain letters, pyramid schemes, or any other form of solicitation, except in those areas (such as shopping) that are designated for such purpose."
However, a site like Yahoo could go above and beyond simply shutting down a chat marketer's account, and sue for a share of the profits that the marketer made using Yahoo's chat rooms.
"I don't see this as a big criminal law problem. If anything it's a civil or administrative concern, maybe something enforced by private lawsuits. So we're not talking about wire fraud. It could be costly for someone who violates these regs regardless," said attorney Walters.
The CAN-SPAM Act might have relevance in a lawsuit against chat marketers, since the law applies to all forms of unsolicited electronic communications. Sending private messages to individuals concerning commercial opportunities are more pertinent to CAN-SPAM than postings aimed at an entire chat room.
"When I log into a chat room, I'm basically inviting people to message me on a particular theme. So it's not the problem of receiving something you don't want, which is what the FTC's Do Not Call List and CAN-SPAM laws prohibit," said attorney DeWitt.
Until the government catches up with the chat marketing phenomenon and enacts specific laws on the matter, the phenomenon would likely go the way of private civil lawsuits rather than criminal cases.
The chat marketing phenomenon already accounts for a sizeable category of postings on SexyJobs.com and AdultStaffing.com for so-called "text chat operators."
Interestingly, repeated e-mails to one such advertiser, Chat4CashOnline.com, have bounced back. A contact phone number for another, ChatterTraffic, led to a voicemail box that was always full despite multiple attempts.
Four of the larger companies in the chat marketing space -- CashCow.com, Text4Chat.com, ChatSales.com, and EnticeCash.com -- don't even have any contact information posted on the public portions of their respective Web sites.
One company that advertises for "text chat operators" on AdultJobs.com has a confidentiality agreement with firms that outsource the so-called fulfillment of text chat. "There are texting companies and they employ us to answer the messages," said the owner of an outsourcer in this space.
The anonymous source pointed out that peer companies in the text marketing space have a tendency to disappear, citing as an example a defunct outfit called Blue Frog.
"Any time you see a lot of turnaround or coming or going in an industry, that's a pretty good indication that there's some legal concerns," said attorney Walters.
Meanwhile, attorney J.D. Obenberger doesn't see anything actionably fraudulent in chat marketing if they don't make false promises.
"I don't think it's deceptive when marketers are doing the chatting if the reality is that the guy gets conveyed to the cute girl," said Obenberger. "If the chatters actually state that the Webcams are one-on-one but they're not, that's a horse of a different color, and that is probably deceptive."
The chat marketers often lead visitors toward a trial area of the intended site, where only a minimal subscription fee applies, if at all. Additional upselling will try to entice full-fledged subscriptions, which typically kick in when people forget to unsubscribe from the trial memberships.
Chat marketers can also ask a third-party website for permission to promote services there. "If a chat site's terms of service say you as a customer can't solicit that doesn't mean the site's employees or contractors can't solicit," said Obenberger.
Obenberger said infringements of the rules on a third party's site, like Yahoo, are more likely to result in membership suspensions rather than more serious legal action.
Since the chat marketing space is still relatively new, only time will tell whether lawmakers will catch up with the industry and enact regulations. For now, the practice appears to be a booming business.
This article originally appeared in the January issue of AVN Online. To subscribe, visit AVNMediaNetwork.com/subscribe.
