November 05, 2001 01:58pm
Porn Sites to Pay $30 Million for Fraud
Source: Reuters
(Washington, DC) -- The operators of Playgirl.com and several other Web sites offering adult-oriented material agreed to pay $30 million to settle charges that they illegally billed thousands of customers for what were advertised as free services, the Federal Trade Commission [http://www.FTC.gov] said on Monday.
Crescent Publishing Group Inc. and 64 affiliated corporations also agreed to post a $2 million bond, and owners Bruce Chew and David Bernstein agreed to put up $500,000 each before they continue to operate the Web sites, the consumer-protection agency said.
The FTC and the Attorney General of New York State [http://www.oag.state.ny.us] alleged in their complaint that visitors to Playgirl.com, HighSociety.com and dozens of other Web sites were asked to provide credit card numbers to prove that they were old enough to view adult-oriented material. Although visitors were told that access to the site was free, they were then charged recurring monthly fees of between $20 and $90, the FTC said. The charges showed up on consumers' credit card statements under a variety of different names, making it difficult to have them removed, the FTC said.
The settlement requires the defendants to get express permission from consumers before billing them in the future, and requires them to keep records to ensure compliance. The $30 million will be distributed to consumers who have been defrauded by Crescent Publishing. If that proves impractical, the money will be divided equally between the U.S. Treasury [http://www.USTreas.gov] and the State of New York [http://www.state.ny.us], the FTC said.
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