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Adult Website operators settle phone scam charges

Published: Thursday, August 30, 2001

Updated: Wednesday, July 25, 2012 20:07

WASHINGTON (AP) — Two Internet operations settled government charges that they scammed consumers out of tens of thousands of dollars in telephone payments by routing their computer connections to Africa and South America.

Visitors to the Websites were offered access to adult materials without the need for credit cards.

But when they selected that option, their computers disconnected from their Internet provider and made an international call to another computer system, the Federal Trade Commission (FTC) said Wednesday.

Most of the victims were unaware of this technical sleight of hand until they received phone bills for hundreds of dollars with calls costing as much as $7 a minute, the agency said.

Those running the Websites received a percentage of the profits, said FTC attorney Thomas Rowan.

‘‘Their incentive for doing this is to get to a population that doesn’t have credit cards or online checks,’’ Rowan said. ‘‘A number of the consumers we spoke to said it was their kids who made the call.’’

Two Canadian companies — Virtualynx Internet, Inc. and 583 665 B.C. Ltd. — and their president, Charlo Barbosa, have agreed to pay the government more than $26,000, which the FTC will attempt to return to the victims, Rowan said.

On their Websites, the companies used banners reading ‘‘No credit card? No check? No problem!’’ to encourage people to download software to view adult material, the FTC said. The software was a ‘‘dialer’’ program that redirected computers to Madagascar, an island nation off the east coast of Africa.

Rowan said that while people who used this program had to agree to a statement that mentions long-distance charges, the companies didn’t verify that the people requesting the adult material were the same people paying the bills.

‘‘It’s deceptive to say they have to pay,’’ he said.

In a separate case, the FTC said Website operator Hillary Sheinkin of South Carolina has agreed to pay about $10,000 to settle similar charges. Her Websites promised free access to adult materials, but users had to download software that made calls to Guyana in South America.

Lawyers for Barbosa and Sheinkin did not immediately return calls seeking comment.

The agreement bars the Website operators from billing consumers without permission. The operators don’t admit breaking any law by settling the charges, which concern their billing practices and not the adult content of their Websites.

The FTC recommends that consumers:

• Be wary of any program that enables a modem to redial to the Internet.

• Cancel the connection and hang up if an alert appears on the computer indicating that it’s dialing by itself.

• Talk to children and recognize that they are obvious targets of international modem dialing scams.

• Monitor children’s Internet use by checking the Web browser history files and cache.

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