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FTC Actions
FTC Action Summaries
Shared Network
Services86. FTC v. Shared Network Services, LLC, et al. CIV. S-99-1087 WBS JFM (E.D. Cal. filed June 2, 1999)
87. FTC v. WebViper, LLC, et al., 99-T-589-N (M.D. Ala. filed June 9, 1999)
88. FTC v. Wazzu Corporation, et al., SACV-99-762-AHS (C.D. Cal. filed June 7, 1999)
Defendants: Shared Network Services d/b/a First Page, Peter Westbrook, WebViper, LLC d/b/a Yellow Web Services, Tigerhawk, LLC d/b/a Yellow Web Services, Thomas J. Counts, Patrick C. Taylor, Richard M. Bagdonas, Wazzu Corp., Jayme Amirie, Kenneth Gharib, and Kirk Waldfogel.
Type: Web Site Cramming
The defendants allegedly charged small businesses for "free" Web site services. According to the Commission, the defendants offered small businesses Web sites for a free 30-day trial period. Small businesses allegedly were told that they would have 30 days to cancel, that they would have a free period of time to review a sample Web site or written materials, or that they could sign up for 30 days without any obligation whatsoever. In each case, however, the Commission charged that small businesses had unauthorized fees "crammed" onto their phone bills (Shared Network and Wazzu) or direct invoices (WebViper).
The Commission filed three separate lawsuits in early June 1999, alleging that the defendants had deceived small businesses through their telemarketing solicitations and billing practices.
In the
Shared Network Services matter, TRO and asset freeze were entered on June 3, 1999. A Stipulated Preliminary Injunction was entered on June 7, 1999 and a Final Judgment and Order for Permanent Injunction and Consumer Redress was entered on June 12, 2000. The order enjoins defendants from misrepresenting that they will not charge customers for website services before the end of a trial period, and that they will not charge customers who cancel before the end of a free trial period, or within some specified period. The order also requires that defendants not charge customers for website services unless the customer takes affirmative steps to order the web services. The order prohibits defendants from representing that consumers are legally liable to pay for unauthorized services. Defendants are also permanently enjoined from billing after a free trial period and must pay valid refund requests within 7 days. The order also sets forth certain requirements if they record a sales pitch. Finally, the order requires that defendants redress a specified class of consumers; however, the amount of redress has not yet been established.In the
Web Viper matter, defendant Bagdonas was dismissed and a Final judgment and order was filed May 30, 2000, which enjoins the remaining defendants from misrepresenting that they are obligated to pay for services received during a free trial period or for unauthorized services; enjoins defendants from billing prior to three days after the expiration of the trial period; and requires defendants to honor cancellation requests. A judgment of $88,426.25 was suspended.http://www.ftc.gov/opa/1999/9906/small9.htm (press release - complaints)
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