May 15, 2003
As part of a wide-ranging crackdown on Internet fraud, the Federal Trade Commission (FTC) has asked a district court to take action against Alyon Technologies of Seacaucus, NJ, and TelCollect of Norcross, GA.
According to the FTC, the defendants use a modem dialing program to disconnect consumers from their own Internet service providers and reconnect them to the scammers' network without the consumers' authorization or approval.
Using the dialing program, the defendants then capture the telephone number used by the modem, and match it against several databases of telephone subscriber information, which frequently contain errors. The subscribers identified as responsible for the captured telephone number later receive bills charging them $4.99 a minute for each minute the defendants claim the Web video services were purchased, regardless of whether the subscribers authorized the purchase.
The FTC alleges that many consumers never visited the defendants' sites at all, and were charged due to billing service errors of which the defendants were aware. Furthermore, according to the FTC, the defendants' dialing program downloads onto consumers' computers without their authorization.
The FTC coordinated the investigation of this case with the offices of numerous state attorneys general, and with the assistance of the New Jersey Attorney General; the Georgia Attorney General; the Georgia Governor's Office of Consumer Affairs; the Wisconsin Department of Agriculture, Trade and Consumer Protection; the Illinois Attorney General; and the Idaho Attorney General.
