The great Moldovan porn fraud: The Federal Trade Commission said today that 38,000 consumers who were caught up in a Web scam in which they were bilked of US$2.47 million in long-distance phone charges will get full credit for the money they lost.
The scheme publicized in February involved several sites that invited visitors to download "viewing software" in order to receive free pornographic pictures. The downloaded software was equipped to do something that went unnoticed by most users: it turned off their modem speakers, dropped users' local phone connections to their ISPs, then redialed phone numbers assigned to Moldova to re-establish a connection to the porn sites.
Defendants included Internet Girls and Audiotex Connection Inc., both of Rockville Center, New York; Promo Line Inc., of Dix Hills, New York; William Gannon, one of the principals in Internet Girls, Audiotex, and Promo Line; and David Zeng, a computer programmer who worked on the scam.
Under an FTC settlement, the defendants will pay AT&T and MCI, which will in turn issue credits to consumers victimized in the scheme.
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Kennard's interventionist note: At a news conference today following his official swearing in ceremony, new FCC chairman William Kennard sounded an interventionist note on several issues facing the commission, including liquor ads on television, the battle for control of MCI, and wireless auctions.
"Not one person has told me that more distilled liquor advertising is a good thing for the country," Kennard said.
Kennard said he would judge the competing bids by GTE and WorldCom for MCI Communications "according to what best serves the American public." He also voiced concern that more bidders in the FCC's most recent wireless auction might be unable to pay up, in the wake of bankruptcy filings by the Number Two and Number Three bidders in last year's US$10.2 billion auction.
Kennard had been the commission's general counsel before being nominated by President Clinton to replace outgoing chairman Reed Hundt. He becomes the first African American to chair the commission. (3.Nov.97)
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MS annihilation warning: Orrin Hatch says Microsoft is trying to dominate the Internet. "Microsoft now has the ability to virtually annihilate any competitive product it wants by bringing it into the next version of Windows," the chairman of the US Senate Judiciary Committee told The Wall Street Journal. "There's evidence that they are aggressively seeking to extend that monopoly to the Internet, and policy-makers have to be concerned about it."
The Utah Republican's committee is scheduled to hold a hearing on Internet commerce Tuesday. Hatch's comments come soon after the Justice Department charged Microsoft with violating a 1994 consent degree that placed guidelines on the company's marketing of its Windows operating system. (3.Nov.97)
