14 DAY TRIAL // The Federal Trade Commission has reached a settlement with the alleged perpetrators of a scam that tricked domain owners into paying for unnecessary or bogus services, which bans them from similar activity in the future.
In June 2008 the FTC sued Internet Listing Service, a Toronto-based company, for sending out fake invoices for Internet domain name-related services to thousands of consumers, small businesses and other organizations via email.
The rogue invoices falsely suggested that domain owners were required to pay an annual fee for a service called "WEBSITE ADDRESS LISTING" in order to keep their domains.
Furthermore, the messages were crafted in a way that made it appear as if they originated from the target's real domain registrar.
In addition to instructing users to pay an unnecessary fee, the emails also advertised a different "Search Optimization" service, which was said to improve the website's rank on search engines and lead to a substantial increase in traffic.
According to the FTC, there were no real benefits in paying for either of the domain name services mentioned in the fake invoices.
The settlement, which includes a suspended judgment of $4,261,876 for injuries brought to consumers, was reached with defendants Isaac Benlolo, Kirk Mulveney, Pearl Keslassy, and 1646153 Ontario Inc. Another defendant, Steven E. Dale, received a default judgment of $4,261,876.
The settlement and default orders bann all of defendants from misrepresenting: "that they have a preexisting business relationship with consumers; that consumers owe them money; that they will provide domain name registration; and that they will provide 'search optimization services' that will substantially increase traffic to consumers' Web sites," the FTC said in a press release.
"The defendants are also required to disclose any material restrictions or aspects of any goods or services they provide," it added.
It is also noted that the charges originally brought in the case against Ari Balabanian and Data Business Solutions, the company were he is a director, were dropped.
You can follow the editor on Twitter @lconstantin