[Federal Register Volume 66, Number 81 (Thursday, April 26, 2001)]
[Notices]
[Pages 20994-20995]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10348]


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FEDERAL TRADE COMMISSION

[File No. 002 3003]


Voice Media Incorporated, et al.; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the

[[Page 20995]]

complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before May 17, 2001.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pennsylvania Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: C. Steven Baker, Federal Trade 
Commission, Midwest Regional Office, 55 E. Monroe St., Suite 1860, 
Chicago IL 60603-5701, (312) 960-5634.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted by the 
Commission, has been placed on the public record for a period of thirty 
(30) days. The following Analysis to Aid Public Comment describes the 
terms of the consent agreement, and the allegations in the complaint. 
An electronic copy of the full text of the consent agreement package 
can be obtained from the FTC Home Page (for April 17, 2001), on the 
World Wide Web, at http://www.ftc.gov/os/2001/04/index.htm. A paper 
copy can be obtained from the FTC Public Reference Room, Room H-130, 
600 Pennsylvania Avenue, NW., Washington, DC 20580, either in person or 
by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania. Ave., NW, 
Washington, DC 20580. Two paper copies of each comment should be filed 
and should be accompanied, if possible, by a 3\1/2\ inch diskette 
containing an electronic copy of the comment. Such comments or views 
will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement containing a consent order from Voice Media 
Incorporated and its two officers and owners, Ron Levi and Paul Lesser 
(the ``respondents'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and the comments received, and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    The respondents own and operate several adult entertainment web 
sites. They sell paid memberships to their sites, and promote them by 
periodically offering ``free'' trial memberships. This matters concerns 
allegedly false and deceptive representations about those trial 
memberships. The Commission's proposed compliant alleges that the 
respondents falsely claimed that they would not charge membership fees 
to consumers who canceled their trial memberships within seven days of 
providing credit card information and agreeing to participate in the 
free trial membership offers. In fact, in numerous instances, the 
respondents charged monthly membership fees to consumers who canceled 
within seven days of agreeing to participate in the trial membership 
offers.
    The complaint also alleges that the respondents failed to disclose 
clearly and conspicuously: (a) That they immediately charge consumners' 
credit or debit cards for one month's membership fee effective as of 
the date that the consumers first provide credit or debit card 
information and agree to participate in the free trial membership 
offers; and (b) that they treat consumers' submissions of credit or 
debit card information as authorization to bill consumers' credit or 
debit accounts.
    Part I of the proposed order prohibits the respondents from making 
any false or misleading representation of material fact, or omission of 
material information in connection with the advertising, promotion, 
offering for sale, or sale of any goods or services via the Iternet, 
including, but not limited to, false or misleading representations: (a) 
That they will not charge consumers for goods or services during any 
free-trial period, (b) that their goods or services are ``free,'' 
``without risk,'' ``without charge,'' or words or similar import 
denoting or implying the absence of any obligation on the part of the 
recipient of such offer to pay for the goods or services; and (c) that 
a request for a consumer's credit or debit card number is for age 
verification only.
    Part II of the proposed order prohibits the respondents from 
requesting any payment information, other than for purposes of age 
verification, from any consumer before ensuring that the consumer has 
received notice of each of the following material terms and conditions: 
(a) The applicable membership cost and the length of any free or trial 
membership; (b) the way in which a consumer may cancel, including any 
limitation on the time period during which a consumer must cancel in 
order to avoid charges; (c) a telephone number, facsimile number, and 
e-mail address where consumers can contact the Proposed Respondents; 
and (d) access to the complete terms and conditions of the respondents' 
offer.
    Part III of the proposed order prohibits the respondents from: (a) 
Billing any consumer who has not agreed to purchase goods or services; 
and (b) billing any consumer after the expiration of any free or trial 
offer without having first clearly and conspicuously posted notice of 
the expiration of the offer or provided access to that information by 
means of a clear and conspicuous hyperlink on their log-in page.
    Part IV of the proposed order prohibits the respondents from : (a) 
Unilaterally changing any terms or conditions of their offer in a way 
that would increase the consumer's financial obligations; or (b) 
materially altering the cancellation or refund procedures or terms, 
without first providing a consumer with fifteen (15) days notice and an 
opportunity to cancel. The notice must be made clearly and 
conspicuously.
    Parts VI through IX of the proposed order are reporting and 
compliance provisions. Part X is a provision ``sun setting'' the order 
after twenty years, with certain exceptions.
    The purpose of this analysis is to facilitate public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 01-10348 Filed 4-25-01; 8:45 am]
BILLING CODE 6750-01-M