Court Restricts Internet Service Provider’s Telemarketing Efforts

Several Miami-based entities have been permanently restricted from making false claims while marketing Internet Service Providers, according to the Federal Trade Commission, whether via telemarketing or any other mediums, according to the Federal Trade Commission.

In 2003, the FTC accused Epixtar Corp.; Liberty Online Services, Inc.; National Online Services, Inc.; B2B Advantage, Inc., formerly known as SBA Online; and William Douglas Rhodes, President of Epixtar, Liberty, National, and SBA Online of defrauding consumers, small business and non-profit organizations they called selling services such as Internet access and Web site design.

According to the FTC, the defendants claimed during telemarketing calls that they were updating information that was part of a pre-existing business relationship. Those contacted by the defendants were then told they could try a variety of online services for a 30-day period cost-free, but were not given adequate opportunity to cancel the services, which were added to their telephone bills at a rate of $29.95 plus tax per month once the grace period ended.

The FTC further charged that the defendants agreed to send additional information to prospects that requested it, but did not send it and began billing the prospects anyway. The defendants also proved difficult for customers to contact, and refused to provide refunds when reached.

According to a final judgment from the District Court for the Southern District of New York, the companies, and Rhodes, are barred from misrepresenting the terms of their offers, such as negative-option payment and cancellation terms, regardless of the mediums used to contact prospects. They are also required to disclose that the call is a sales call,

Additionally, Rhodes had a $33 million judgment levied against him. If at some point he is found to have misrepresented his financial condition, he would be required to pay it.

None of the companies cited in the court papers were listed in Florida telephone directories.