TRENTON – Attorney General Peter C. Harvey announced today that New Jersey has entered into a settlement agreement resolving allegations of consumer fraud against Alyon Technologies, Inc. a North-Jersey-based Internet company accused of linking unwitting Internet users to pornographic "pop-up" images, and billing them for Web-based services not requested by consumers.

Under the agreement, the Seacaucus-based Alyon is required to implement a verification program entitled "Expressly Verifiable Authorization" for all future Internet transactions. Through that program, Alyon is to ensure that Internet users understand they are about to employ a service provided by Alyon, and that they receive "clear and conspicuous" information regarding the terms and conditions of that usage – including Alyon's contact information and all charges to be incurred.

According to Harvey, the State has received more than 700 consumer complaints about Alyon – more than half of them from New Jersey residents -- while states across the nation have also reported receiving high numbers of complaints. In most cases, consumers have complained that they received bills from Alyon or its billing agent -- often in the $150 range -- for access to on-line pornography. Typically, complaining consumers have denied accessing pornography, and have said they never authorized Alyon to charge for on-line services.

Aside from New Jersey, 22 states have signed onto the settlement agreement with Alyon. The agreement prohibits Alyon from billing minors for its Internet services. It also requires that the company provide full cash refunds to all consumers who submitted a complaint about Alyon services billed before June 15, 2003, and who have already paid. Regarding complaining consumers who were billed before June 15, 2003 and have refused to pay, Alyon must cancel their debt and halt all collection activities.

"This is an important settlement agreement for all New Jersey consumers -- not only for the hundreds of Internet users who were directly impacted and complained, but for countless others who use the Internet every day or might elect to do so," said Attorney General Harvey.
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"This agreement will make consumers who were exploited whole by requiring Alyon to provide refunds, or to forgive their debt," Harvey added, "and it will make Alyon more directly accountable. "

Said Acting Governor Richard J. Codey,"This agreement will significantly improve protections for New Jersey consumers – particularly minors – from access to pornography and other inappropriate information. We are committed to ensuring that those who utilize the Internet are not exploited, and that companies who do business on the Internet act responsibly."

In May 2003, New Jersey filed a three-count complaint against Alyon alleging that the company had engaged in fraudulent billing practices by switching Internet users to its network so as to bill them for its services – even though the users did not seek those services.

Prior to the filing of a complaint, many Internet users had complained about Alyon to the Division of Consumer Affairs located within the Office of Attorney General. Among the complaints, some consumers said they had been confronted with unsolicited "pop-ups" and spam e-mails linked to the Alyon network. In some cases, parents reported that pop-up windows containing pornographic images from the Alyon network had appeared on computer screens while their children were using Web sites featuring music or games.

According to Harvey, the billing of consumers for services not requested, as well as incidents in which unsolicited materials "popped up" on computer screens, appear to have been related to flaws that existed in a proprietary computer program used by Alyon. The system could not detect or deter Internet use by minors or other unauthorized users, he explained, and sometimes generated incorrect billing due to database inaccuracies.

"This matter provides a cautionary tale for Internet users," said the Attorney General. "Internet businesses certainly have a duty to act responsibly and within the law, but consumers also need to protect themselves by being extra vigilant about what they are ‘clicking on' when surfing the Web, and about sharing credit card and other personal data. Although the Internet can be a great tool for entertainment, communication, and research, it is also fraught with potential dangers and headaches for consumers and their children."

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