FOR IMMEDIATE RELEASE:
May 15, 2003
FOR FURTHER INFORMATION CONTACT:
Genene Morris (973)504-6327
NEWARK — New Jersey is suing a Secaucus, N.J., company alleging it used fraudulent tactics to divert Internet users from their usual Internet Service Providers to its own network, which provides access to hardcore pornographic Web sites, billing them exorbitant fees for services they didn't request, Acting Attorney General Peter C. Harvey and New Jersey Division of Consumer Affairs Director Reni Erdos said today.
New Jersey is one of at least 12 states to file suit today against Alyon Technologies, Inc., which provides access to and billing services for Web sites offering Internet pornography. The Federal Trade Commission also filed a lawsuit against Alyon and others in Georgia this week. Alyon is headquartered at 1 Harmon Plaza, Secaucus.
New Jersey's three-count complaint, filed in Hudson County Superior Court, alleges the company's unlawful business practices resulted in multiple violations of New Jersey's Consumer Fraud Act. The complaint alleges Alyon engaged in fraudulent billing practices by switching Internet users to its network so it could bill them for their services — even though the users neither sought out nor wanted the services. Many Internet users complained to Consumer Affairs that they were confronted with unsolicited "pop-ups" and spam emails linked to the Alyon network. They reported that despite their efforts to escape from or delete those items, which promoted porn sites, they were drawn into the network.
The complaint also alleges the defendant failed to implement meaningful safeguards to ensure minors were not being given access to the "videotext" services ‹ Internet-based "adult" entertainment ‹ featured on its network. Numerous parents complained that pop-ups with pornographic images from the Alyon network had appeared on computer screens while their children were in music Web sites or game sites.
"The action we're announcing today shows our resolve to fight unfair and fraudulent business practices wherever they may occur," Acting Attorney General Harvey said. "We are seeking to bring an end to this company's unlawful scheme and see to it that affected consumers are made whole."
"Alyon Technologies' alleged activities are underhanded and despicable," said Director Erdos. "They demonstrate a complete disregard for New Jersey's consumer protection laws."
More than 350 New Jersey consumers have filed complaints about Alyon. Consumers have complained that the company forced them into using its services by installing a dialer program onto the hard drives of their computers, in many cases without the consumers' knowledge or consent. Alyon prominently features a "no credit card" billing option, whereby consumers are allowed to access services offered by the Web sites featured on Alyon's network and pay the bill without using a credit card. To utilize the alternative billing option, consumers were required to download Alyon's dialer program on their computers. However, an undercover investigation by Consumer Affairs' E-Commerce Investigative Unit confirmed that an Internet user could download the dialer without being aware of it once linked to one of the Alyon sites.
Once the dialer had been installed on their computers, many consumers found that when they signed onto the Internet, they would automatically be routed from the ISP of their choice to Alyon's network, which utilizes a 201 area code, the complaint alleges. Once there, consumers complained they found it nearly impossible to log off. Meanwhile, they were racking up charges for every minute they spent connected to the network — even if the time was spent trying to disconnect from Alyon. Alyon charged $4.99 a minute, resulting in some consumers incurring hundreds of dollars in charges, the complaint alleges.
In addition, the company used an "Automatic Number Identification" system to determine the telephone number from which the call was placed and charged that phone line's subscriber — regardless of whether he or she was the person who downloaded the program and accessed the "videotext" services, the complaint alleges. Bills from Alyon have featured both a Norcross, Ga., address and more recently an Elizabeth, N.J., P.O. Box.
New Jersey's complaint also alleges Alyon violated provisions under the Consumer Fraud Act governing information services. Specifically, the complaint alleges, Alyon failed to clearly and conspicuously provide the per minute charges; failed to clearly and conspicuously disclose instructions to minors to obtain parental consent before engaging in the information service and to hang up unless he or she has parental consent; and failed to provide consumers with a reasonable opportunity to disconnect the call prior to incurring a charge and following a clear disclosure of the charges.
The State's complaint also alleges that Alyon, among other things:
misrepresented the billing terms;
failed to correct billing errors and to credit accounts after receiving notice of such errors from consumers;
continued to send consumers bills even after being put on notice of disputed charges;
failed to provide credits when minors accessed pornographic Web sites;
imposed onerous requirements on those who were billed improperly and who sought refunds (such as requiring consumers to forward a birth certificate to prove age);
and failed to disclose to consumers that receiving its services would result in the downloading of a dialer software that severs the consumers' connection to his or her regular ISP and diverts them to its service.
In addition, the complaint alleges, Alyon does not require any verification of age beyond superficial warnings to prevent access by minors to hardcore pornography on its network. Furthermore, the complaint alleges, because Alyon's software automatically downloads without affirmative action by consumers, any warnings concerning underage access are nullified.
"As a result, many parents complained that their minors were able to access the pornographic materials on Alyon's network without proper authorization," Director Erdos said.
"Internet users who suddenly become connected to an Internet pornographic site without their consent or who discover new and unfamiliar icons on their desktops should immediately contact their Internet Service Provider and/or telephone company to find out how best to handle their particular situation," Director Erdos added.
The State's suit seeks to have Alyon pay restitution to affected consumers as well as civil monetary penalties, attorneys fees and costs.
The following states also sued Alyon today: Arkansas, California, Connecticut, Illinois, Kentucky, Missouri, Nebraska, North Carolina, Ohio, Texas and Wisconsin. Also, Pennsylvania today entered an Assurance of Voluntary Compliance with Alyon.
Deputy Attorney General Carol G. Jacobson of the Division of Law is handling this matter on behalf of the State.
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