Clarification: Alyon Technologies Litigation

The Federal Trade Commission is clarifying an October 29, 2003, press release concerning its case against Alyon Technologies, Inc. Some consumers may have misunderstood the press release as permitting them to delay paying bills received from Alyon until the Commission's case is resolved. As clarified by a subsequent court order, issued on October 17, 2003, the court's July 10, 2003, order did not "prohibit Defendants from billing, collecting, or attempting to collect from past consumers. Instead, the Order set forth the parameters under which Defendants may continue to conduct these activities... ." Specifically, the court ordered the use of a dispute resolution mechanism as an interim means available to consumers who wish to establish that Alyon had billed them without their permission.

In May 2003, the FTC and 13 state attorneys general charged that Alyon was illegally billing and collecting for videotext services purportedly accessed on the Internet. According to the FTC's complaint, the defendants used a modem dialing program that disconnected consumers from their own Internet service providers and reconnected them to the Internet sites Alyon billed for without the consumers' authorization or approval. Using the dialing program, the defendants allegedly captured the telephone number used by the modem and matched it against several databases of line subscriber information, databases which frequently contain errors. According to the FTC's complaint, the line subscribers identified as responsible for the captured telephone number later received bills charging them $4.99 a minute for each minute the defendants claim videotext services were purchased, regardless of whether the line subscribers authorized the purchase.

The FTC refers all consumers to the court's orders of July 10th and October 17th for further information. The two court orders can be accessed on the Commission's Web site - www.ftc.gov. A hyperlink to the two court orders is provided on the Commission's Alyon News Release page on the Internet at www.ftc.gov.

NOTE: The Commission files a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

Copies of the complaint and the judge's order are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.