Federal judge tells Internet company to refund disputed charges
By PAUL WENSKE
The Kansas City Star
A federal judge has issued a preliminary order requiring an Internet company to refund money to thousands of consumers allegedly charged for pornographic services they never purchased.
The Missouri attorney general's office also has a separate pending lawsuit against the company, Alyon Technologies Inc., which operates a billing system for adult Web sites.
The preliminary order issued by the federal judge in Georgia does not end the federal case, nor does it affect the outcomes of separate cases filed in 13 other states, including Missouri.
Hearings are still pending on claims by the Federal Trade Commission that Alyon illegally billed consumers and then collected money from people who had never visited a pornographic site. The FTC claims it received more than 1,200 consumer complaints.
The Missouri attorney general's office said it received 100 consumer complaints. The lawsuits filed in Missouri and other states allege Alyon manipulated software to capture the phone numbers used by the modems of many Internet users.
The lawsuits contend the company matched the numbers against several databases and then charged users $4.99 a minute for the time it claimed they viewed video programming.
Alyon has disputed the claims. Company officials said they had been cooperating with the government. They also claim the FTC has mischaracterized the case to the public.
According to the FTC, Alyon is required to pay restitution to consumers who have already filed written complaints with Alyon and the FTC, or will within the next three months.
To receive restitution, consumers must show either that they did not subscribe to the telephone line when the charges were incurred, that a minor accessed the services without permission or that the site was accessed without the consumer's authorization.
Alyon has 30 days in which to investigate the disputed charges. An independent arbiter will have final say over disputes that affect payments to consumers.
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I was uaware that the Federal Trade Commission has TWO lawsuits against Alyon. One to force the company to significantly change their business practices and provide restitution to (censored) customers. The second, like the State AG's, to secure massive monetary and other damages in specific civil suits.
Alyon lost big in the first case, it will be interesting to see what the FTC does with the second action.
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