RJB Telecom

Adult Web Site Operator
Faces $250,000 Penalty

WASHINGTON, Sept. 26, 2001 -- An adult Web site company has agreed to stop billing consumers' credit cards and phone bills without their authorization and will establish a $250,000 escrow fund that will be forfeited if more violations occur.

In October 2000, the FTC filed suit in U.S. District Court in Phoenix, Arizona alleging that RJB Telecom and its principals, Robert and Richard Botto, operated adult web sites that provided viewers a free "teaser" visit and allowed the option of paying by credit cards or telephone bills for membership.

According to the FTC, large numbers of consumers complained that they were billed for access to the web sites without their authorization, and in many instances, had never accessed the web sites at all. The agency also alleged that consumers who tried to exit or closed the credit card membership screen were shifted to a screen that gave them a phone dialer option.

That option installed a dialer program which disconnected the viewers' computer modem from its internet service provider and dialed an international telephone number to reconnect the computer to the Web sites. Long distance phone charges would show up on consumers' phone bills without notice that the charges were for RJB's services.

The FTC charged that billing and attempting to collect money from consumers who had not authorized the charges was unfair and deceptive and violated federal law.

Under the terms of the settlement, consumers who access the Web sites in the future will be sent an e-mail confirming their agreement to purchase RJB's adult services. The settlement bars misrepresentations that consumers have purchased or agreed to purchase goods or services or that they owe the defendants money. It also requires that consumers who have been improperly billed will be credited within five business days.

The settlement permanently bars the defendants from billing consumers without their express, verifiable authorization; bars billing through third parties without identifying their corporate name and bars billing phone numbers without the express, verifiable authorization of the line subscriber. The defendants are required to implement rigorous fraud detection and prevention measures for credit and debit cards and the Webmasters who run many of their sites.

RJB Telecom, Inc., is based in Scottsdale, Arizona.

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