Camfrog is a mostly-adult-oriented video chat service that caters to pedofiles and drug users. The service is comprised of 'rooms' where users can text chat, and view the webcams of other users.
The basic software and use of the service is free, with limitations (most notably, only a single user's cam can be viewed, and in adult-only video chat rooms, another user's cam can be viewed for only 10 seconds). If a user wants to remove those restrictions they can purchase a subscription to the service for USD $50/year.
The scam:
Many users in camfrog's adult-only video chat rooms show prerecorded video on their webcams, which is almost always pornographic in nature. The intent of the video is to deceive other users into believing that they are viewing a feed from a live webcam, when in fact they are not.
Camfrog's terms of service specifically prohibits users from showing prerecorded video on their webcams, but in spite of this and numerous reports that Camfrog claims they immediately investigate and take action on, Camfrog in fact, allows prerecorded, pornographic video to be shown on user's webcams.
Because many users who have not purchased a subscription are deceived by these prerecorded pornographic video (they only have 10 seconds to view them, which is not long enough for them to realize that they are watching a prerecorded video), they often purchase a subscription to the service. Camfrog knows this, and for that reason, it allows prerecorded video to be shown for the specific purpose of defrauding potential customers.
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