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Dublin firm accused in web sex scam

February 16, 2011

By Staff Reporter

By Harry Keaney

Even if you have never visited an internet porn site, you might want to take a close look at your phone bill.

That’s because a company with an Irish address has been charged with fraudulently billing U.S. customers for "videotext" services — internet-based adult entertainment.

The Federal Trade Commission is suing Verity International, Ltd., alleging that the Pembroke Street, Dublin, company, and others, billed more than 100,000 customers an average of nearly $250 apiece for connections to Madagascar, off the coast of Africa, which the FTC says the customers never purchased or authorized.

Also accused with Verity were Integretel, Inc., of San Jose, Calif.; eBillit, a subsidiary of Integretel, also in San Jose, and Robert Green and Marilyn Shein, both citizens of the UK and part owners of Verity, according to the FTC.

Integretel, acting on Verity’s behalf and through its subsidiary eBillit, was responsible for collecting payments sent to the post office box listed on the Verity bill, the FTC alleged.

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Last week, U.S. District Judge Lewis Kaplan, of the Southern District of New York, issued a temporary restraining order halting the alleged unlawful conduct and freezing the assets of the defendants.

Following complaints, an FTC investigation revealed that charges on consumers’ phone lines were being initiated by dialer software downloaded from teaser adult web sites. According to an FTC statement, many line subscribers had no idea why they were receiving bills for these charges. Others had discovered that a minor in their household, or another person who did not have the line subscriber’s authorization, accessed the web sites and downloaded dialer software.

The dialer program allowed users to access the adult content without any means of verifying that the user was a line subscriber or was authorized by the line subscriber to incur such charges for videotext services.

Once the dialer software was downloaded, it disconnected a consumer’s computer modem from the usual internet service provider, dialed an international phone number to Madagascar and reconnected the consumer’s modem to the internet from some overseas location, opening at an adult web site.

Line subscribers — the consumers responsible to pay phone charges on the telephone lines — then began incurring charges on their phone bills for the remote connection to the internet at the rate of $3.99 a minute, according to the FTC.

In its complaint, the FTC alleged that although Verity’s bills deceptively represented that the calls reconnecting consumers’ modems to the internet terminated in Madagascar, they were in fact "short-stopped" in London or some other location. Therefore, line subscribers were charged the rates to Madagascar at $3.99 a minute, compared to about $0.08 to London.

The FTC pointed out that Verity International, Ltd., was "in no way affiliated" with Verity, Inc., of Sunnyvale, Calif.

Efforts to contact Verity were unsuccessful. An Eircom telephone operator told the Echo there was no listing for that name in Dublin.

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