At the FTC’s request, a U.S. district judge has permanently shut...
At the FTC’s request, a U.S. district judge has permanently shut the illegal operations of a firm that placed bogus charges on the phone bills of thousands of small businesses and consumers for Internet-related services they hadn’t agreed to buy,…
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the commission said. The judge barred the defendants from charging consumers’ phone bills and barred them from telemarketing unless they get prior approval from the FTC and the court. The court also ordered third parties through which charges were placed, including local exchange phone companies, to return money in escrow to consumers, and ordered the defendants to pay up to $38 million in restitution to consumers. The commission sued Inc21 in January, charging that the company hired offshore telemarketers to call prospective clients to sell its Web-based services. The defendants used LECs to place charges, usually $12.95-$39.95 a month, for the services on the phone bills of consumers and businesses that were told by telemarketers that a call was only to verify business information, that declined Inc21’s offer of Internet services, or that were told they would receive a free trial offer but weren’t informed that they would be charged if they didn’t cancel, the FTC said. The commission charged that the defendants had violated the FTC Act and the Telemarketing Sales Rule.