September 26, 2001 01:44pm
Porn site settles fraud charges, posts $250K bond
Source: Reuters
(WASHINGTON) -- An adult Web site company charged with illegally billing customers' credit cards agreed to post a $250,000 bond and undergo scrutiny to ensure that it does not continue the practice, the U.S. government said on Wednesday.
The Federal Trade Commission said in a release that RJB Telecom Inc., of Scottsdale, Arizona, offered Web surfers a free visit to its pornographic Web sites with the hopes that they would sign up for a membership.
According to numerous consumer complaints, the company billed visitors' credit cards without their authorization, in some cases billing consumers who had never visited the Web sites at all.
The company also redirected the modems of some customers who refused to sign up to dial an international toll call, racking up long-distance charges as it reconnected to the Web sites.
The FTC filed suit against the company and its principals, Robert and Richard Botto, in October 2000.
Under the terms of the settlement, the company must not engage in such practices in the future, and must send an e-mail confirmation to consumers who sign up for its services. Consumers who have been improperly billed must be issued refunds promptly.
The company must also set up a fraud-detection system, and establish an escrow account of $250,000 that will be forfeited if they violate terms of the settlement.
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