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Will Destroy Personal Information Collected from Consumers

rhinoPoint Settles FTC Charges

WASHINGTON, Nov. 20, 2001 -- rhinoPoint, an Internet operation that conned consumers into paying membership fees and turning over sensitive personal and financial information, has agreed to settle Federal Trade Commission charges that the operation violated federal law.

The FTC charged that rhinoPoint, owned by New Millenium Concepts, deceptively claimed it would pay for consumers' Internet access.

The settlement gives the defendants 30 days to delete or destroy the personal identifying information that they collected from consumers. It also bars the defendants from making misrepresentations in the advertising, promotion, or sale of any products or services, bar them from collecting or disclosing personal information obtained by misrepresentations, and

The FTC alleged that the defendants operated a Web site where they offered to pay Internet access fees for consumers who became part of their "network" and paid a one-time "set-up" fee ranging from $10 to $16. To join the network, consumers completed a questionnaire detailing personal information and agreed to complete monthly marketing surveys. Consumers who signed up were required to complete "member profile forms" that asked for such information as credit card numbers and income level.

The Web site claimed it marketed "group data response to companies that provide us survey questions for our members." The site's privacy policy stated, "We do not sell or provide individual names, addresses, phone numbers, credit information or other personal contact information data to outside parties under any circumstances."

On May 23, 2001, the FTC filed suit in U.S. District Court naming as defendants New Millennium Concepts, Inc., doing business as rhinoPoint, and their principal, Karl V. Kay. Kay and the businesses are based in the Chicago suburb of Hoffman Estates.

On June 1, 2001, the Court entered a stipulated preliminary injunction order that prohibited misrepresentations, froze the defendants' assets, and barred the use of the consumer data, pending trial. The settlement announced today concludes that litigation.

The settlement bars the defendants from making misrepresentations in the advertising, promotion, or sale of any products or services. Specifically, it bars them from misrepresenting:

• that consumers who sign up as members and complete monthly marketing surveys will be reimbursed for Internet access charges;
• the availability or basis of any reimbursement, refund, or rebate promotion or program; and
• the terms, restrictions, costs, or conditions in the promoting or offering of any product or service, including, but not limited to, the promoting or offering of products on the Internet.

It also bars the defendants from collecting, using, selling, renting, leasing, transferring, or otherwise disclosing any personal identifying information obtained by misrepresentations. The settlement requires that within 30 days, the defendants delete or destroy all the personal identifying information they collected from consumers at their rhinoPoint Web site.

Based on financial documents provided by the defendants, no consumer redress has been ordered. If the financial information proves inaccurate, the Court will order a judgment against Karl Kay in the amount of $481,172.05 -- the amount of consumer injury in this matter. Finally, the settlement contains record-keeping requirements to allow the Commission to monitor the defendants' compliance with its order.

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