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.
“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.”