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The FTC has charged a purported Web cramming operation with billing small business consumers for "free" Internet services, without full disclosure of the negative option features and without consumers' authorization, and even when some consumers said that they were not interested in the offer. The FTC alleges that Epixtar Corporation and its subsidiaries violated federal law by deceptively marketing a free trial of Internet services and then, unbeknownst to consumers, unfairly billing consumers' telephone accounts without their express informed consent. In filing its complaint, the FTC is seeking permanent injunctive relief, as well as consumer redress, including rescission of contracts, refunds, and disgorgement of ill-gotten gains. At the FTC's request, the United States District Court for the Southern District of New York entered a temporary restraining order on October 29, 2003, which prohibits the defendants from making further misrepresentations and freezes their assets.

The FTC's complaint names 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. All of the defendants are based in Miami, Florida. The FTC alleges that, since December 2001, the defendants have used telemarketing to market Internet services, including Internet access, Web site design, and other services, to small businesses and non-profit organizations - such as churches or community service organizations - nationwide.

To help small business consumers more fully understand offers of Internet and other services and how to avoid potential fraud, the FTC has developed a consumer alert entitled "Website Woes" that is available on the Commission's Web site as a link to this press release. The FTC warns small businesses that some unscrupulous companies, claiming to provide free web design and hosting services, are billing small businesses for services that were never authorized and have little value. The bogus charges usually appear on businesses' phone bills - an illegal practice known as "cramming" - or on fraudulent invoices.

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