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Adult Web Sites Face FTC Suit Over Billing

Courts: Agency says firms falsely charged consumers' credit cards. Regulators seek to freeze assets in order to make reimbursements.

August 24, 2000|D. IAN HOPPER | ASSOCIATED PRESS

Owners of scores of adult Web sites have been charged with billing thousands of Web users for supposedly free services and billing other consumers who have never visited the Web sites at all, the Federal Trade Commission said Wednesday.

Both the FTC and the New York attorney general's office filed suit in U.S. District Court seeking to halt the billing practices and have asked the court to freeze the defendants' assets in order to reimburse consumers.

Crescent Publishing Group Inc., based in New York, and its owner, Bruce Chew, as well as David Bernstein are named as defendants in the complaint, along with 64 affiliated corporations that operate the adult Web sites, which include Playboy.com and Highsociety.com.

The so-called free tours generated income of $188 million between 1997 and 1999--$141 million in the first 10 months of 1999, according to the complaint.

The FTC said the defendants operate the Web sites and promote them as free, saying that consumers' credit card numbers are required only to prove that the visitors are of legal age to view the material--a common practice on adult Web sites. The sites say that the credit cards will not be billed, but thousands of customers were charged monthly membership fees from $20 to $90, the FTC said.

"I never saw any terms or conditions regarding how to become a paying member of the site," one consumer stated to the commission in the complaint. "During my time on the Web site, I never thought that the free tour had ended or that my credit card would be billed for visiting the site."

The complaint says that while consumers enter their credit card information, they view adult pictures in the margins of the page. Once the consumer presses a "Continue" button at the bottom of the page, the card is billed, although no Web page says the tour has ended or that their cards will be billed.

Consumers who tried to dispute the charges were thwarted, according to the complaint. The defendants used billing names different than the names of the Web sites, so consumers often had no idea who was billing them.

In the complaint, the FTC cited one consumer who visited Highsociety.com and had no idea why he received five subsequent $49.95 withdrawals from his checking account by companies named Split Back, Romulust and Arachne. The corporations, 63 in all, were all owned by Chew and have the same business address, the FTC said.

Also, the consumers had difficulty contacting the defendants.

A message left at the Crescent Publishing office in New York, listed as Multimedia Forum Inc., on Web site registrations, was not returned.

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