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Tech Industry

Court deals blow to alleged 'Web crammers'

FTC alleged in 2003 complaint that defendants had failed to disclose the terms of Internet service packages.

The District Court for the Southern District of New York on Tuesday ordered a set of defendants to cease practices featured in a 2003 Federal Trade Commission complaint. According to the complaint, the defendants--Epixtar, Liberty Online Services, National Online Services, SBA Online (now known as B2B Advantage) and William Douglas Rhodes, president of the aforementioned companies--misrepresented the Internet service provider services that they sold. The agency said they had been "Web cramming," or making telemarketing calls to small businesses and nonprofit organizations in the U.S., selling "SBA Online" Internet service with the promise of a free 30-day trial. However, not only did they not permit consumers to refuse that 30-day trial, they followed it with a monthly telephone bill charge of $29.95 that was very difficult to cancel.

Rhodes, who has already forked over more than $3.6 million in refunds to customers, has been barred from further misrepresentative practices, whether through telemarketing or otherwise. If Rhodes has misrepresented his financial condition, he will be subject to a $33 million judgment, the FTC said.