Web scam entwines charities.(Who ... When ... Where ... How ... WHAT?)

Maybe it isn't texting that's driving up your phone bill.

[ILLUSTRATION OMITTED]

Several Web site service companies scammed hundreds of thousands of nonprofits and small businesses--with one defendant racking up $4.1 million in fines from the Federal Trade Commission (FTC).

The FTC charges that the defendants used telemarketers to call the nonprofits and businesses to participate in a free 15-day trial Web design. After the sales pitch, nonprofits and small businesses were asked a series of questions that they thought would deregister them from future calls. The company used the questions to gather billing information with unauthorized charges billed to telephone bills.

A spokesman from the FTC said the defendants allegedly designed the scam to specifically target nonprofits and small businesses because they thought the groups would not review their telephone bill and realize the charges.

The last question in the series asked if the person on the phone was authorized to make charges and if the person was over 18, which the defendants allegedly say authorized the transaction. Several defendants and companies named in the case paid $1.2 million to settle the FTC charges and requires defendant Steven L. Kennedy to pay $4.1 million. The Commission filed the complaint against the defendants in the U.S. District Court for the Southern District of Texas, Houston Division.

A spokesman for the FTC did not know the exact number of nonprofits allegedly scammed, and said that the money would be pooled into a fund to split evenly among the organizations and small businesses.

Print Get the Mag Weekly Updates