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Developments of Note

By ALM Staff | Law Journal Newsletters |
January 28, 2005

Downloadable Modem Dialing Billings
'Forgiven' In FTC Settlement

According to a complaint and to settlement documents filed by the Federal Communications Commission (FTC), Alyon Technologies Inc. distributed a modem-dialing program that disconnected customers from their regular Internet service provider and reconnected them to Alyon's network, then billed the charges for access to adult services on the line subscriber's telephone bill. FTC v. Alyon Technologies, Inc., No. 022-3305 (N.D. Ga. Dec. 6, 2004). According to the FTC, many consumers did not consent to the download of the modem-dialing program, never accessed the services that were billed or never authorized such access on their telephone lines, and the company failed to follow FTC regulations concerning the handling of consumer billing disputes, among other things. Alyon agreed to forgo $17 million in consumer bills and forgive an additional $22 million to settle the FTC charges of improper billing for adult videotext services.

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