A New Jersey pay-per-use adult Website biller was ordered to make full refunds to Pennsylvania consumers who were billed erroneously or without their knowledge or consent, Pennsylvania Attorney General Mike Fisher announced May 16.
Fisher said the settlement with Alyon Technologies involves almost 70 complaints from 28 Pennsylvania counties and will get each consumer $14,000 total restitution.
In 2002 and 2003, Alyon "bill(ed) many consumers $4.99 per minute to visit these adult Websites, even though some never accessed the videotext material or even own a computer," Fisher said in a statement. In other instances, he continued, Alyon failed to disclose service terms and fees conspicuously, or verify that any consumer agreed to accept the billing. Consumers had also complained that Alyon either gave them no reply or threatened them with collection agencies when they complained to the company, he said.
Alyon was ordered to make the restitutions and to make "dramatic changes" in verification, as well as requiring those Websites it services "to post in bold notices information regarding access, authorization, and rates for services," Fisher added.
Alyon contracted with a company called Electronic Group Interactive to set up 900-number telephone lines and 201 area code numbers to let Web surfers get adult site access, with EGI having hosting agreements with a volume of adult sites. With the sites being promoted through spam and pop-up ads, Alyon tracked calls to the phone lines to do the billing and arranged to handle collecting unpaid bills, Fisher's office said.
What the victims didn't know, the statement continued, was that automatic dialers were downloaded to their computers to re-route their modem connections from their own Internet service providers to go through an Alyon number, prompting billing from both Alyon for the adult site accesses they didn't know they'd had and by their telephone companies for long-distance charges.
Fisher said consumers got no notice prior to the dialer program's downloading other than a box showing a few lines of text at a time, with the full text proving four or more pages if printed, and asking if they agreed or disagreed at the end of the text.
"We contend that this format to display the terms was clearly not designed to ensure that consumers understood that they were entering into a contract or agreement," Fisher continued. "Even worse, those who did check off the `I disagree' box claimed that they were still billed for these services."
Alyon has until May 23 to implement pre-subscription agreements and other verification systems "that will confirm the party who is authorizing payment" for accessing the client adult sites, Fisher said, as well as building a system to disconnect Web surfers who can't put in the right identifying information after three tries. Alyon is also required to disclose terms and fees "conspicuouslyin a clear and concise manner," and impose a prohibition against distributing dialer programs through spam or pop-ups.
Alyon is further required now to give instructions on how consumers can delete or uninstall programs downloaded by way of contacts with adult sites working through Alyon's numbers, Fisher said.
Pennsylvania consumers who want full refunds can contact Fisher's Bureau of Consumer Protection before August 13, 1-(800) 441-2555; or, by visiting his office's Website. to apply online.
Fisher had recently announced a crackdown in enforcing a new Pennsylvania law against sending deceptive electronic communications including e-mail. "This new law is as an extension of our consumer protection authority," he said at the time. "We will take legal action against offenders who send deceptive or misleading electronic messages designed to swindle consumers."
The law covers e-mail, fax messages, and cell phone advertisements that include false subject line information, invalid return addresses, and "lack of a valid e-mail address or toll-free number that can be used to stop future messages," a statement from his office said at the time the crackdown was announced.
