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The Almighty Buck

FTC Cracks Down On Porn Site Billing Scams 111

smagruder writes "From MSNBC: 'In the Federal Trade Commission's first attempt to halt fraudulent or deceptive billing practices by online porn sites, a major provider of sexually explicit material on the Internet has agreed to provide refunds to consumers whose credit cards were charged without authorization ...' For the rest of the story, go here.

This story perhaps should hit home with many Internet wonks, not just in terms of getting illegitimate charges on our credit cards from porn sites, but from any web site, or from having our card numbers lifted while we are online. I have been fighting with my bank for at least a couple years trying to dispute one illegitimate charge after another. In my opinion, the problem doesn't just lie with the companies making the fraudulent charges, but also with the banks, who are too cheap to create a security process for credit card utilization that 1) blocks particular merchants chosen by the cardholder (I call it "merchant block"), and 2) disallows usage without a password that the cardholder chooses and can change at any time."

Those both sound like reasonable ideas; would any credit card companies like to "add stockholder value" by implementing them? Maybe providing a list of "merchants our customers frequently ask to have blocked" as a default would be a good start.

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FTC Cracks Down On Porn Site Billing Scams

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  • by Chairboy ( 88841 ) on Sunday July 23, 2000 @12:06PM (#911645) Homepage
    The biggest threat to profits in online porn industry right now isn't fraud from people who steal numbers, it's what's known as the 'Gak factor'.

    Typically, this works like this:
    1. Guy visits goatporn website.
    2. Guy pays for goatporn.com on his credit card.
    3. Guy gets off and loves the website.
    (camera pans, one month later)
    4. Wife opens credit card bill and sees charge to goatporn.com.
    5. Wife confronts husband while weeping, convinced she's not satisfying him and that the marriage is about to end.
    6. Guy decides that (after a quick 'GAK!') rather then explain that he loves his wife and just needs some goatporn once in a while, instead claims 'Gosh, I never made those charges!'
    7.Under her watchful eye, he calls the bank and disputes the charges.

    I doubt there's a real industry wide problem with fraudulent charges. In actuality, I suspect it's almost 100% legit charges that get reported as fraud because the significant other is flipping out.
  • To tell you truth I didn't know a minor could get a checking account. (Speaking of which, have you ever tried to explain the value of savings and compound interest and stuff when your daughter sees that the bank is not only not paying her any interest but is in fact charging her for her savings account?)

    No, as age verification they're pretty useless, I agree. If nothing else, all Junior needs is to get a look at Daddy's card and write down the numbers -- unless there's a charge Daddy will never know.

    However, useless standards have never stopped our fearless leaders before.

  • by Anonymous Coward
    "It soon became known that when you joined an Xpics site, the easiest way to cancel was to cancel your credit card," one source, who spoke on condition of anonymity, told MSNBC.com. "That really left a bad taste in people's mouths for the industry,...

    ...yoiks, I would never have guessed the porn folk complaining about the taste of the credit cards...
  • Dude disputes the charges.

    Credit card company calls livegoatporn.com and says "This guy says he never bought that goat porn."

    livegoatporn.com digs up its records and calls dude's ISP. They match dude's user ID to the originating IP at the time and day of the charges.

  • And if someone must buy wanking material because the stuff available free on Usenet just isn't hard core enough, he (or she) should consider buying a Webcertificate [webcertificate.com]. It's a MasterCard number based gift certificate, that also would work nicely as a throwaway credit card number. For $10 (plus a $2.95 service fee), someone could sign up with 10 "Adult Verification Services" in one day, the Webcertificate would be out of money, and no further charges could be made to it. Send the Webcertificate to a throwaway email address for a small degree of anonymity (certainly better than using one's own card). Time to see more? Just get a new Webcertificate. No troubles, except for possibly going blind or insane.
  • First, this problem doesn't just apply to porn sites. There are a lot of non-porn sites out there that carry out the same fraudulent practices. Further, the "GAK factor" may exist to some degree, but when someone disputes a charge with their credit card company, the charge is investigated and usually sent back to the merchant for verification. If the merchant can provide evidence that the charge is indeed legit, then the charge stays.

    Steve Magruder, Technopolist

  • Great idea! I hate to get political here, but maybe we should forward this and other excellent ideas here to the Nader campaign. I would be willing to bet that an issue like this could gain great traction this year.

    Steve Magruder, Technopolist

  • That is very true, I get pissed when I accidentally use a mac machine that isn't a free one and see the dreaded $1.5 charge against my account some machines tell you some don't.
    Useless is a very good way to describe that age verify scheme..I think eventually the credit card companies should have to come forward and start monitoring this. They every so often complain about their consumer outstanding debt being in the billions and growing. If they don't then I feel they are to blame for it as much as the consumer. I think they should have the credit card companies be like a middle man in e-biz sites..like the CCbill and Ibill etc sites.
    For example you make an account on the cc companies site using encriptions (like pgp and etc) e-mail the user of the card when a transaction is processed for that card and make his or hers reply to that be the determining factor of wether or not the transaction is going to be accepted or not.
    I think adding a few more steps like that to an e-biz purchase wouldn't be to troublesome for people to do.
    This may have some flaws and is not perfect but what do we have in place now that is any better or worse?
  • Wasn't that in the movie "Lock, Stock and Two Smoking Barrels?" Not Austrian, but British IIRC.
  • this a proposed scheme from the movie _Lock_Stock_and_Two_Smoking_Barrels.

  • by delmoi ( 26744 )
    It must have been more then a few months then, I know I made $3000.

    We don't know how bad things are in north korea, but here are some pictures of hungry children. -- CNN
  • Let's hope that the porn industry isn't pinning *all* credit card chargeback issues on the "GAK factor." They certainly cannot claim what they have little or no evidence to prove, even if it is plausible.

    Steve Magruder, Technopolist

  • Just go to the check cashing establishment on the corner! They're a dime a dozen! And they usually suck only 3 to 6% off the amount.

    Steve Magruder, Technopolist

  • This reminds me of an urban myth/guaranteed scam that you hear about from time to time.

    Firstly, you put ads out for, say, a heap of hardcore porn. People join up and pay you money. Now you bank that money into account 'A'. A little while later, you contact all of the people and tell them there are some legal issues with the service that you want to check out (being the good business person you are) and in order to be fair to them (the paying customer) you are going to refund their money. You now transfer the money from account 'A' into account 'B' that has a name like 'Anal Sodomizers of the World Unite!'. You send them all cheques with their refunds. The best part is, most of them won't present that cheque and after a certain time frame (differs in each country/state), the cheque becomes invalid and you get to keep the money :) Can't be too upset with that <chuckle>

    I don't know if it has actually been done and I'm not sure how legal it is (the act in itself isn't as far as I can tell, but the intent to defraud is definitely there).

    All standard disclaimers apply (ie. don't sue me when you go to jail :)

  • Of course, with porn, it might be a little bit harder to find or access this information.

    It is extremely hard to find this information, escpically with all those dam pop up windows. I think those are giving javascript a bad name
  • Accually if I sign my check D. Duck it should clear. In fact courts have held that unsigned checks can clear, so long as there is reason to belive the owner of the checking account intended to sign the check but forgot. Courts have also held that I can write out and sign my dads checks (I don't have power of atterny or any such thing) so long as dad would have wrote out that check had he been there - ie if dad always writes a check for the phone bill and I pay the bill one month with his checks).

    Some of the above examples depend more on the mood of the judge then others. I would expect an unsigned or miss signed check to hold up in court (so long as the rest is in my hand writing!) much more likely then someone else writing one of my checks for something that I always buy.

    I have learned to sign my credit card with my right hand, and then sign the recipts with my left. I've only had one clerk ask for further ID, and those signatures are very different.

  • You're absolutely and positively right! We need those censorship laws!

    I vote first for the televangelists that try to screw you out of your hard-earned money.

    Remember, scams aren't limited to porn. If you want to limit scams, you need to limit them all included in your much vaunted religion.

  • As a member of what you would call the Christian Right, I think that there is something that needs to be clarified. To my knowledge, protesting in front of abortion clinics is legal, credit card fraud is not.

    Are there members of any organization (be it right-wing, left-wing, or foreign) that will laugh in the face of legality or morality in order to advance their cause? Of course. Should the rest of the group be judged by this pathetic minority's actions? No.

    My point is that I don't agree with abortion clinics or porn sites, nor do I feel that their presence is good for America. Although an abortion clinic is not someplace my anatomy would cause me to visit, I did spent several months addicted to porn, and it just about destroyed my life. However, even with my own experience, do I think that porn sites should be forcefully shut down, either through DOS or legislation? No.

    I believe that pornography is a symptom of a greater longing deep within someone's empty life. I do my best to spend my life giving people an alternative to that longing. This alternative is something that lasts and will last a lot longer than simply a good wank.

    To quote C.S. Lewis, one of the most respected Christian writers of all time, "If you search for Truth, you may find Comfort. If you search for Comfort, you will find neither Truth nor Comfort."

  • by Anonymous Coward
    I don't understand why people pay for porn sites. I mean, There's so much good free porn out there (www.thehun.net) (www.asstr.org), why don't people just go there and grab some, rather then falling for the obvious "Give us you're credit card number to access free porn" BS.

    The online porn industry is for the most part a disgusting crass system. I don't have a problem with porn in and of itself, but seeing the commercialization of sex like this is disturbing.
  • Personnaly I find that a two months limit is perfectly acceptable. Would you begin to contest a wrong billing that occurred ten years ago? No! Then you need a time limit, and I think that 2 months is plenty enough time to complain.
  • Here in the UK, there's a system for charging directly to customers bank accounts (called Direct Debit).

    The vendor can effectively charge at any time, however the customer has to give permission beforehand and can revoke this at any time (usually by going to the bank, but I've just noticed that my online banking account allows me to see all the permissions and revoke them instantly... Handy ;)

    Of course a similar system could be used for credit cards but in reality it would be practically impossible to change all existing systems. Nonetheless the credit card companies might be willing to give a discount on processing fees to merchants operating the new scheme since presumably their losses to fraud wuold be lower.
  • by kevin805 ( 84623 ) on Sunday July 23, 2000 @12:12PM (#911666) Homepage
    How generous, offering to give a refund.

    Imagine you have been operating a car theft ring for several years. Then you get caught. So you offer to return all the cars which you borrowed without authorization to their owners.

    Pardon me, but isn't charging someone's credit card without authorization a felony? I'm thinking "federal wire fraud".
  • Also features in the British mini-series "Eureka Street". I think its been around longer than either.

    Simon
  • Really. The first thing to realize is that your credit card is your *friend*. And so is the credit company *as long as you pay up!*.

    The fine print on my card says that if my *card* is stolen, I must report it immediately, and that I may be responsible for all charges in between when my card was stolen and when I reported it stolen (or up to $50, I forget the details).

    The fact is.. if my card is still in my wallet, then my card is not stolen. So.. if someone elses gets the number, somehow, and uses it.. I have no problem. Call company, tell them I didn't do it, and they refund it. IT' sup to the merchant to *prove* that I used my card to charge something. If he has no signature, and no other identifying info (shipping address, etc..) he's out of luck.

    As for these sneaky porn charges, the fact is...
    Even if there is fine-print, you can call your credit company and say 'they said nothing about blah-blah-blah'. The fact that you didn't see something is not directly relevant. You did not agree to those charges. You were under the impression that you would pay $X and that's why you did it. If it was otherwise, that's their problem. Your credit card company *will* cancel the debt and take it back to the merchant.
  • Obviously a comment from someone who has never bought pr0n. :) Porn companies have legitimate sounding names... no company bills as goatporn.com. It's run by the Sample Interactive Media Company, which is what it shows up as on your credit card bill.
  • I really loved their advertizing setup, they were so unbelivably stupid that they didn't check the data you sent them back for any validity. I managed to make over $3000 from them by getting 'unique IPs' (though, they were all on the same subnet ).

    Skript Kiddies didn't need to steal credit card numbers from Xpics when they could just steal money itself (and legaly, I read every word of the agreement and i wasn't violating anything in it :)

    Of course, Xpics was doing the exact same thing to their customers with their fucked up cancle procedure. You went online to cancle, and if they felt like it, they could just reactivate your acount, so you would have to cancle again, and again, and again...

    Xpics finaly wised up to the fake advertizing though, so I only got to do it for about a month or two. But it was so nice to have two big fat checks for $300 each comming in each month... The only problem was that it really warped my sense of the value of money, but I can't really complain there.



    We don't know how bad things are in north korea, but here are some pictures of hungry children. -- CNN
  • Is this actually specific to American Express, or is that just an example?

    Thanks!
  • ...and research them through friends...

    Oh man, what a conversation in the bathroom this would be...

    "Hey man, I've been hunting around for some good sources pr0n and I ran across this awesome site. You ever been there? How're their credit ratings?"

    "Yep, in fact, the boss is also a major client... that's how I found out about it."

    "So that's why he's always in his office... Any problems with them?"

    "Not really... once they double billed me for a show with twin sluts, but other than that, they're on the up and up. "

  • And, of course, Xpics probably logs the IP from where the account was opened.

    As if I'd trust the logs from http://random.pr0n.com
  • I'm in the process of switching banks now.

    Mind you, the total of the disputed charges was never enough to exactly bankrupt me, so I've patiently put up with it over time, esp. because the bank eventually reversed most of the charges.

    However, the bank has become a lot more intransigent lately, and I've recently moved anyway, so now was a good time to make a change.

    Steve Magruder, Technopolist

  • Seems to me you should give people the option. "How would you like this item to appear on your credit card statement?
    - Walbey Interactive Media Group
    - Livegoatporn.com"
  • Imagine you have been operating a car theft ring for several years. Then you get caught. So you offer to return all the cars which you borrowed without authorization to their owners.

    This is similar to the sweet deal SouthWestern Bell got several year ago over intentionally overcharging customers. They gave each of their customers a card/account worth $100 worth of free long distance.

    The total amount of long distance given out was less than the profits they made overcharging. The accounts were notoriously unreliable and tedious to use; it took about five minutes just to make a call. And, to top it all off, they could only be used for calls that were long-distance but in the same area code (in 918, about half the population was in local call range).

    Ah, justice.


    My mom is not a Karma whore!

  • How does this add up:

    "I managed to make over $3000 from them..."

    with

    "I only got to do it for about a month or two. But it was so nice to have two big fat checks for $300 each comming in each month"

    Dude, that's either $600, or $1200. Not "over $3000".

  • by codejnki ( 16214 ) on Sunday July 23, 2000 @01:27PM (#911678) Homepage
    I work in customer service for a very large ISP. At least once a week I have to deal with a call from an irate person who has found a charge on their credit card that they never expected to be there. Normally I post a refund to the credit card and get the person off the phone. If it was a hacked account submit it to the fraud department.

    Here is where I begin to loose track of the situation. In the case of one individual, 17 monthly charges had been posted before they decided to call in and discuss the situation. It is obvious by looking at the usage that the account was never used, but 17 monthly charges before it ever clicked to me seems idiotic. I calmly inform the individual that I am only able to refund two months back. The next thing said is usually "I'll get my credit card company in on this." To which I respond that "As far as credit cards are concerened, all charges are valid unless disputed within the fist 60 days."

    Read the fine print on your credit card statements. If you don't dispute that charge within 60 days the credit card company isn't going to do anything for you. Consumers seem to forget all that legal mumbo jumbo they sign when they sign up for credit cards. You are legealy and financially responsible for that card. Every single charge. If you were an idiot and didn't read your monthly statements for the past 17 months, PLEASE do not yell at me telling me that we've been stealing your money.

    I think truthfully that credit cards are a much bigger and deeper problem in this country (the US) than just hacked cards being used on the internet. It strikes right at the heart of consumerism in America. I like to say this country was built on the backs of plastic.

    Ok enough preaching.
    ----
    "War doesn't determine who's right, just who's left"
  • One problem with this. What does the ISP gain from this? Investigating logs for porn vendors doesn't really gain good publicity...

    Mind you, I can imagine some sysadmin doing this in return for a three months subscription to livegoatporn.com.

  • Let's start a company call "Your (embarrassing) checks cash...No Questions!"

    We take a cut (say 10%) and make millions.

    Remember : You Read It Here In /. First!

  • Actually no. From Lock Stock and Two Smoking Barrels, except it was the "Arse Ticklers and Faggots" company...
  • Think about it: by disputing charges, vendors could ultimately lose their credit charging priviledges. So, if the Xtian right orchestrated a campaign, could they effectly DOS porn sites?

    matt
  • So all those flights I book over the phone by credit card can be refunded? Cool! Even though I had to present photo ID to pick up the tickets, and the airline has a record of me being on the flight? Even cooler!
  • Its not like pr0n is ever unprofitable when the provider is honest and scrupulous
  • by Anonymous Coward
    ....I thought I'd never see that money back!
  • I have been fighting with my bank for at least a couple years trying to dispute one illegitimate charge after another.

    dude.... move to another back..... or do you just like punishment???
  • uumm.. that would be "bank".... doh
  • I'm not sure, but I thought I saw a commercial on television here recently about Discover coming up with some idea on cracking down on fraudulant charges.

    Anyways, if people would take a few precautions, there would be a lot less hassle over this entire matter. Checkout their SSL Certificates. If you have any questions, read their privacy policy and research them through friends or other online sites that might rate the vendor.

    Of course, with porn, it might be a little bit harder to find or access this information, but attempting this is a lot better than fighting with the bank/credit card companies over charges you did not place.


    MunITioN
  • Ah. But you have to show your face :)
  • by HerrNewton ( 39310 ) < ... <sneakemail.com>> on Sunday July 23, 2000 @11:36AM (#911691) Homepage

    The FTC also said the company charged some consumers who never visited Xpics' sites, but it did not explain how that occurred.

    Script Kiddies

    Wouldn't you just love to see a script kiddy thrown in jail for credit card fraud? Man... that'd be great. "733+ hax0r, meet your new cell mate Bubba."



    ----
  • In order to keep an orderly society, nobody should have a problem if laws are passed that require merchants to be *clear* and *concise* with regards to the money their fees and prices.

    This is required of phone companies now, that they have a clear and concise way of explaining the increasingly complex phone billing structures.

    In normal business, it is considered fraud in some cases to 'mislead' people into purchasing something, even if there is fine print..

    Why shouldn't a porn merchant be held accountable for misleading poeple? They make their sites purposely misleading because they *know* people will fall into the trap, and not dispute it afterwards. They are therefore making money off of *deceit*, which is fraud.
  • by rifter ( 147452 ) on Sunday July 23, 2000 @05:58PM (#911693) Homepage

    Every time I saw that "this is a free trial, your cc will not be billed" I thought, yeah right, why do you need it, then? Bottom line, you can't trust people in certain industries, like porn, drugs (including pharmaceuticals), tobacco, cars, etc. And the seedier the industry is, the more likely you will be ripped off outright. I would imagine that the company was banking (pun not intended) on the fact that people would be afraid to dispute the charges lest they be known as "perverts" or worse, being charged with a crime. (In many states, the laws are vague enough and far-reaching enough that Playboy and Penthouse, to say nothing of Hustler, could be considered illegal if they did not have big bad lawyers...)

    Maximum Pc had a short segment on this, their answer was that the bank has nothing to do with crimes, and with hundreds of millions of dollars being spent on porn annually in the US, no one is alone despite the denial. (Everyone knows the Us is comprised of a populace of teetotaling virgins who never use that horrible language those Hollywood liberals from canada use, right?)

    Oh and the same pornography sites that were doing this were among the worst in creating the pop-up hell (browser hijack expliot.. kill one window and two more come up). It was done through a javascript though, so a word to the wise, set javascript off or set it to "prompt" if you think you will need it for a site. No JS, no hijack!

  • by Anonymous Coward
    there's money! And where there's money, there's credit card scams and the like. Nowadays anybody will do anything to make some money - after all, it's just "capitalism!"
  • Actually, IIRC, the credit card verification (put in your credit card number to show you aren't a minor), which this is at least partially due to (according the MSNBC article) was created by the whole CDA hoopla.

    unless my memory is worse than I remember...

  • Honestly, there's some really shitty people out there; I got to see a lot of them as a Comptroller. My favorite scam was the "rich person using disputing charges as a cash flow management technique." Which I saw numerous people do. My personal favorite incident was the guy who flew his family to Switzerland on his American Express. First class, about $20k bucks. Had a grand time. Got home, disputed the charges. So the travel agency (of which I was the Comptroller) gets out not only their 10% commission (or whatever it was on that particular flight, I've forgotten), but the 90% they paid to the airline. For eight months. I just wish businesses had the ability to prosecute people like that. Do losers like that REALLY think the airline didn't record their passports? But no, he had a legal right to contest it BUT THERE WAS NO PENALTY FOR LYING. I think another poster has it right: probably most of this "fraud" wasn't fraud at all. _Deirdre
  • move to another back.

    This is usually harder than getting the bank to give you money. Me, I've got all my cash stuffed in my matress. Must get a combination lock for it some time.

    For some reason, people are surprised when you buy a brand new car with cash.
  • alt.binaries.nospam

    that works.
  • by caveman ( 7893 ) on Sunday July 23, 2000 @11:38AM (#911699)
    Thankyou for contacting us regarding the incorrect charges to your credit card from Porn-O-Matic Inc.

    According to the new code of conduct aggreed to by the internet sex industry, you should only have been charged for six hours viewing, and not the seven hours charged.

    We trust that the matter has been resolved to your expectations.

    May we also take this oppertunity to inform you of our member discounts from Grabbit, Floggit, and Leggit partners, Divorce lawyers.
  • 4) Authorise
    take a look at http://paybox.net/
    there you can make a creditcard alike payment with authorizasion.
    It's a simple system where the credit card company, sends a SMS message to the card holder, when they recive a request from the company wanting the money. And without your reply including a pin code, the payment dosn't happen.
    In Hamburg the taxi's already use it. (acording to www.3sat.de)
  • The only way I got around illegal charges was to get a credit card with a low balance $500. This way if someone lifts my card # I am only out the first $25. Banks will never do anything for its customers. They look at you like a criminal when you try to take money out of your account. They act like its their money.
  • Heh... bubba won't need a port scanner for him either. =)
  • Its not just signatures that they don't check. A few times over the years I have accidentally stuffed the wrong check into the wrong envelope while paying bills.
    The funniest example was once I got a notice from the phone co that they were going to close my service for only paying $10 of the bill.
    Turns out I accidentally sent them my CD club check. So I checked the other end. Sure enough, the CD club had me listed with a hundred dollar credit on my account.

    ---
  • Good point. I'll do that.
  • I was responding to the post above, which included, "This just proves the point that pornography is bad for everyone, exactly what all good Christians have been saying all along." and closed with, "Don't get me wrong, I'm all for freedom and the Bill of Rights but not when it's destroying our society. Thank you and God bless."

    That was posted as AC, so I don't know if it was your post or not, but I think it was fair to infer a Christian POV.

    I suspect, however, that it wan't your post, and that perhaps you thought I was replying to a different comment. OTOH, I don't see any other "goodcitizen" posts in this thread, so I don't really know what's up with you.

  • I don't know. Personally I don't trust them because the required info is enough to use it in a transaction. The only thing that is more scary than that is to use a mac/check card that is tied directly to your bank account. Which raises another question about this type of verification.
    A minor can get a checking account at a bank. With most checking accounts now days they automatically get a mac card. They are mostly support by visa or mastercard. How can these companies verify that they are a minor? To the merchant they see it as a visa/mastercard.
    When I got my checking account about 8 years or more ago you had to ask for mac cards (at least at the bank I used at the time). I got the card after I was 18 because of a requirement the bank had where you had to have the account open in good standing for a year before getting a card.
  • I will be at IA2000 [ia2000.com] again this in September, in New Orleans, once-again telling Adult providers about a payment system [e-gold.com] that will allow them to get paid and STAY paid, with NO CHARGEBACKS (my mantra for Miami's IA2000 last year).

    Still, this article brings up an important reason why I haven't been too successful with the adult industry so far, IMO (it's certainly not for lack of trying!!!). They want to automagically charge people who didn't even visit their (stale, in many cases) sites this month, and with e-gold [e-gold.com] they'd have to work harder, and not all of them want to work very hard, since they've been used to this mint (er...goldmine?) of automatic-charging. Using a medium where their customers see what they'll pay every month might cause those customers to want them to do something every month. IMO, this rant probably doesn't apply to all pron-sites, YMMV, etc.

    As usual, any /. reader who sends me an account number will get a spot of e-gold to try, it's useful for more than just adult stuff or really-cool gambling sites [thegoldcasino.com], especially if you folks'd take advantage of it.
    JMR
  • by MOMOCROME ( 207697 ) <momocromeNO@SPAMgmail.com> on Sunday July 23, 2000 @12:31PM (#911708)
    back in the early 90's I was a bill collector for 900 and 976 phone sex companies. we represented several of those co's, and it was common knowledge that they'd gouge the prices like this, usually with a $2.99/minute ad, and $2.99 a minute front end msg, then a disclaimer 'subject to change', then the menu of chat rooms, then the addendum latest price of $4.99/minute (which was the maximum allowable price). Hundreds of phone sex lines followed this practice, and suckered them in by the 10,000's.

    It gets worse, see. First, usage of the service automatically signed you up for a credit account, and half the charges were applied to that account, to obfuscate the scam. nearly everyone was shocked to recieve a bill from the phone sex company, some paid withouta peep, others tried to complain in vain.

    Also, early on it was realized that there was enormous latitude in the collection process, with the outfit I was involved in acting as a 'first party' collection agency to circumvent normal FTC regulations, plus the looming threat of exposure to friends and family and reportings to Trans Union and TRW.

    I was young and impressionable, this activity was all couched in phrases that suggested legitimacy and legality, but once I realized the full extent of the evil, I fled forthwith. These guys are bad, bad people. My prediction is that they will pull a stunt like the one mentioned in 'Lock, Stock and Two Smoking Barrels' and send refund checks with an account name like 'Dildo Lovin' Ass Sluts Incorporated', which nobody in they're right mind will cash. Toooooo sad...

    -=(V)0(V)0cr0(V)=-
  • Isn't "destroying" in the eye of the beholder?

    Steve Magruder, Technopolist

  • by Anonymous Coward
    I run a large porn site which bills with an innocuous sounding name. I actually fought with my partner regarding this on the theory that advising prospective customers that charges would be attributed to - say - Drunken Old Perverts, Inc. would INCREASE sales. I mean, I'd sign up and frame the damn bill on the living room wall above the sofa. :-)

    I lost that fight.

    Anyway, to all you oppressed drunken old perverts who also happen to be married, fight the power!

    -- (Name withheld pending final signatures :-)
  • Don't get me wrong, I'm all for freedom and the Bill of Rights but not when it's destroying our society. Thank you and God bless.

    First off, that post should not have been moderated down. It is probably intended as a troll, but it's one of the rare devils-advocate posts; these should be highlighted.

    Second, you're an idiot. I could just as easily argue that credit cards caused this problem, or computers. And the fact that you used a computer to post means that you are going to Hell.

    Now this post should be moderated down...


    My mom is not a Karma whore!

  • by Anonymous Coward
    Once an online company automatically enrolled
    me for two months after a "free test drive." They refused to refund me the money, "you didn't read the fine print."

    I just went straight to my credit card bank (Wells Fargo) and asked for a chargeback form. I told them which charge it was, they sent me a form which I filled out and returned--no embarrasment at all. The money was refunded, and the site was charged a "chargeback processing fee" by the bank.

    I've done similar with my Discover (was double charged by a sleazy "las vegas tour" solicitor). I feel very safe using my credit card... even if I have a feeling that I'm being scammed.
  • From the net...

    Australian Police have been unable to recommend a prosecution for the following scam:

    A company takes out a newspaper advertisement claiming to be able to supply imported hard core pornographic videos. As their prices seem reasonable, people place orders and make payments via check. After several weeks, the company writes back explaining that under the
    present law they are unable to supply the materials and do not wish to be prosecuted. So they return their customers' money in the form of a company cheque. However, due to the name of the company, few people will present these checks to their banks. The name of the company:

    "The Anal Sex and Fetish Perversion Company"
  • My prediction is that they will pull a stunt like the one mentioned in 'Lock, Stock and Two Smoking Barrels' and send refund checks with an account name like 'Dildo Lovin' Ass Sluts Incorporated', which nobody in they're right mind will cash. Toooooo sad...

    That was a great bit!

    I'm also reminded of the bit from Fight Club where the airport guy explains the situation when luggage is found to be vibrating: ``Nine times out of ten, it's an alarm clock. But sometimes... It's a dildo. We never imply ownership, though: it's always... the dildo, never... your... dildo.''

    `` But I...''

    ``That's allright sir.''

  • I gotta say this... If surfing a pron site or subscribing to one causes a real problem for you and your significant other then you probably have the wrong spouse for you as there is not a 100% compatability there...It has been my experience that the sites usually use a pretty innocuous name that doesn't indicate that they are a pron site when it shows up on your bill so embarrassment should not be an issue (if you really fear your other half). Besides there is plenty of free pron out there and if you subscribe to one of the age validation services there are thousands of sites that are free for you to use for using thier service. May I suggest to those that are in this situation that you use the old standards: buy some magazines or dvd's and get busy the old fashioned way... for a quick change in your sex lives use the other hand (j/k).
  • iv chosen to ally myself with good christians? in fact i was prepareing to sacrifice some babys for satan untill i came on this pathetic attempt at useing the topic to promote your own moralist garbage please do the world a favor and stick your head in a stove and turn it on thank you . not to be off topic but something needs to be done about how credit cards work credit card fraud is big buisness in america .
  • by Anonymous Coward
    Hrmm... interesting argument, but don't you think parents should just get their act together. Those are the people who should be watching out for the kids, not the government (Their job is to bomb third world countries). We have freedom, but with it comes responsibility, take it and take hold of your life. People seem to think that because they believe in an ideal, the government should inforce it. Wrong! The government was designed by some wise men who, even though they believed strongly in god, made sure that everyone (even agnostics) could be free. Don't forget we're just a bunch of drunken rebels. Sorry, had to say it. thanks.
  • To all those pointing out "Lock, stock and two smoking barrels" -- this Urban legend predates that movie by several years if not decades.

    Although given the relative cleverness and realism of the story, I think it's pretty likely people have actually done it, urban legend or not -- it would work.

    I'm an investigator. I followed a trail there.
    Q.Tell me what the trail was.
  • by Anonymous Coward
    usenet is the best source of pics. aub [google.com] and a t1 [uu.net] will yield more porn pics then one person could ever need. i'd recommend looking at the "nospam" groups myself, they tend to have less spam (didn't see that coming did you?). sadly usenet is 90% spam when you troll for binaries. in addition to pics video is a must have, see above AC posts on where to get free videoz.

    open source porn! heh.
  • SETTLEMENT
    Under the "stipulated judgment" filed with the court, Xpics Publishing and its principals, Mario G. Carmona and Brian M. Shuster, did not admit to any violations of the law.


    Eh? If blatant stealing isn't a violation of the law, I don't know what is. It could hardly have been a more blatant "violation of the law" if he had knocked an old lady's teeth out with a cricket bat.

  • If you're worried about what your children are doing online, why don't you take some action to prevent them from becoming "subversive maniacs." This is not the role of the government, but the role of the parent to decide when the child is old enough to make decisions about concerning "harmful materials like pornography, bomb making plans, drugs"
  • ...I never use pat sites...oh and no one will give a credit card to a nine year old. Sheesh.
  • Then use the net and find another account. There are plenty of places out there that do not charge for kid's (or adults) savings accounts, and some will even entice you with a bonus 50 or 75 bucks for maintaining a min. bal. for a certain period. You should be teaching your daughter to get the best return on her bucks. In the U.S., most credit unions only require a min of $5 or $50 for a share savings account.
  • Speaking of "wank-o-matic", there used to be free rotating porn at the pr0n-0-matic at http://auto.pron.org/ [pron.org], but they've apparently changed the pictures in their database to more... appropriate ones. Still a funny site, though. It used to be run by some CMU [cmu.edu] people -- check out the "development team [pron.org]" to see some fun being poked at the MIT Wearable Computing Team [mit.edu].

    A similar setup exists (with a very interesting photo database) at http://www.stileproject.com/rnd/index.php3 [stileproject.com]. Oh, I should warn you -- don't go to that link unless you're seriously deranged.

  • In my opinion, the problem doesn't just lie with the companies making the fraudulent charges, but also with the banks, who are too cheap to create a security process for credit card utilization.....

    Although they probably deny it... but if you look at it this way the banks are not being "cheap".

    Whenever a chargeback happens, not only does the bank get 100% of the charge back from the merchant, they also charge the merchant a $10-25 charge for each chargeback.

    So if the credit card company makes 1% on a normal charge ($1 on a $100 charge).. that same company will end up making 10 times that much on a chargeback.

    Granted there are administrative costs the credit card company has to pay for in order to process the chargeback.. but I doubt its $10 a chargeback.
  • Switch on the sarcasm filter :)

    The point was exactly, that in this age of enlightened phone/computer bookings, a signature is no longer required...

    On that note, remember the ancient system of swiping cards through some clunky thing to take an imprint? A restaurant in Melbourne had a famous customer, photocopied his imprint, blew it up really large and put it in the window. "Look who eats here!" Only problem: they didn't black out his number. He had to cancel the card shortly thereafter.

    And a current affairs show, doing a beatup on internet credit card fraud... "admittedly, no-one in Australia has been charged with doing so, but we're sure it'll not be long" (*blah*). Funnily enough, the reporter flashed her credit card to the camera on air. Guess how many people freeze-framed it and used it? I'm not sure, but I remember it was in double digits. :) Delicious, sweet, irony :)

  • The FTC also said the company charged some consumers who never visited Xpics sites,

    Or so they claimed. This sort of thing makes pressing charges kind if difficult.
  • You know... As much as I detest the Christian right, this comment is really quite offensive. Why do you suppose that the "Christian Right" (A nebulous term if I ever heard one) would stoop to something amounting to credit card fraud? Aren't you just stereotyping them (with a fairly inaccurate stereotype)?

    --

  • by Anonymous Coward
    The International Internet Commerce Act (IICA) of 1994 actually does provide for the billing of American Express credit cards, even if consent is not given. This is covered under section II-4D.

    "The vendor, upon recieving the method of payment, shall gain full access to provision good to this card with or without given consent of buyer"

    This clause has not yet been ammended, the IICA of 1999 will fix this, but is still being negotiated.
  • by milkman1 ( 139222 ) on Sunday July 23, 2000 @11:44AM (#911730)
    I am not sure about the value of blocking specific merchants.
    1) It would seem that few merchants would accept future charges from a customer who had disputed charges.
    2) Most bad merchants will be fined heavily and probably lose their merchant acounts.
    3) It would seem to create oportunities to rip off legitamate merchants. Forinstance merchants who verified credit cards at purchase but didn't bill them until the product shipped. (a bad customer could simply ban the merchant between the two acount accesses)

    IMHO a system which banned most merchants in problem catagories but allowed specific merchants to be quickly unbaned

    I would propose a system as follows:
    1) Allow banning of certain types of business (or all busniess) (Porn, Ebusiness, Mail order, 1-800 number, ALL, etc.)
    1a) require a one day waiting period for this to prevent scam in (3) above
    2) Allow banning of merchants who you had contested charges with instantly.
    3) Allow banning of other specific merchants with a 7 day waiting period to help prevent problem 3.

    4) Allow instant unbanning of any merchant or catagory by calling an 800 number or by going to a website and entering a password.
    5) Allow a customer to set a price threshold below which authoriztion is not required (in some or all catagories).
  • Hmmm, you detest the christian right, and yet you claim that I am inaccurately stereotyping. Hmmm, antiabortion protestors chain themselves in front of abortion clinics, and therefore effectively deny services. Why is it such a stretch to believe they wouldn't do something similar to porn sites?

    Using the "christian right" is much simpler to foster discussion than to post my message with the subject line of "Could the (insert your favorite far right wing organization here) DOS porn sites?"

    matt, registered republican
  • by evilj ( 94895 ) on Sunday July 23, 2000 @11:46AM (#911732)
    Most of these porn companies rely on the embarrassment factor to be able to get away with this.

    In other words, most of their customer are too embarrassed to complain either to the company in question, or to the their own card company.

    The dialogue might go something like this:-

    Card company: What is the nature of your complaint, sir?

    Customer: I was billed without my authorisation by a company called "Wank-o-matic"

    Card company: [stifles giggle] I see. Do you know how they obtained your card details.

    Customer: Yes. I gave my card details to them to get a free preview of their "Jugs-o-rama" web site, but I cancelled my membership before the deadline.

    Card company: [explodes into laughter] but did you have a good wank, sir?
    Mass Debate [mass-debate.net]
  • Darnit, somebody cought on to me! :-)

    I opened a checking account with my bank the day that they let me--my 16th birthday. Included with that was a VISA check card. Today I'm still only 17...

    Although I don't like to admit it, I've been able to use it more than once to view age restricted items at eBay and other "unsavory content". he he he. ;-)

    So to anyone putting together an age verification system out there--the credit card check thing is easily and legally circumvented. :-)
    --
  • by Anonymous Coward
    a story that's REALLY targeted towards slashdot readers.
  • Not necessarily... if one presumes that these people are lay-persons, not of the type to know how to flush their cache, cookies, etc., you still might be able to find some "incriminating" evidence on their computers. If Xpics set a members cookie or something, it likely has an expiration date fairly far into the future.

    And, of course, Xpics probably logs the IP from where the account was opened. This would choke and die for the AOLs of the world where a single IP is but a drop in a vast DHCP pool, but might be useful for company networks, smaller mom and pop ISPs, static IPs, etc.

    ----
  • Name: infinite porn loop

    Description: Machine is compromised when end user attempts to close a pornographic page. This pops up two new pornographic pages. Each of these subsequently pops up two more pages until a stack or buffer overflow occurs. This compromises the system and allows root access on port 69.

    OS's affected: ALL. Using Nescape or Internet Explorer can be compromised

    Solution: Until patches for Netscape and IE are available, it is recommended that users browse with Lynx, although this will interfere with legitimate pornographic viewing.
  • The industry site for this topic is ccwatch.net [ccwatch.net]. Another good article [nwsource.com]on the "Gak" factor is in the Seattle Times.
  • Haven't these people ever heard of alt.binaries.erotica? Why pay for porn?

    Not that I would know, of course...
  • by Insane One ( 63516 ) on Sunday July 23, 2000 @11:54AM (#911747) Homepage
    Whenever I see a site that wants to use my credit card to verify I am not a minor I just close that page out and forget about it. It sounds to shady to me...sorta like a clerk or other person at a department store saying "Let me hold your wallet while you try on the new pants". Is all or some of your money going to be there let alone your wallet for that matter going to be there when you get back? That is the same difference between these places wanting to verify your age by credit card. Just my $.00000002 worth (2cents after taxes and depreciation)

  • by david duncan scott ( 206421 ) on Sunday July 23, 2000 @11:58AM (#911750)
    I realize that you are an individual with standards of your own, but you've chosen to ally yourself with "good Christians", so I'll ask you to be a spokesman of sorts:

    Why should the government be deciding whether you and your children can see naked women on the Internet, and yet shouldn't be deciding whether or not they show naked women in schools?

    (Oh, and while we're here, may I point out that over the years there have been any number of scams involving religion, apparently proving the point that religion is bad for everyone. As a matter of fact, when groups of pornographic zealots start a civil war somewhere, or kill themselves and their children with poisoned Kool-Aid, pornographers will have begun to catch up with religion as a force for good).

  • by The-Bus ( 138060 ) on Monday July 24, 2000 @02:05AM (#911751)
    I worked in credit card fraud for one of the biggest issuing bans a few years ago, and saw every kind of charge on user's accounts.

    To put the most important part of the post here, by federal law, you do NOT have to pay any more than $50 of fraud whenever your card or credit card is compromised. Most banks are smart enough to absorb the first $50 of fraud anyways and not charge the consumer. Otherwise there'd be thousands of people a month having to pay $19.95 to Plymouth Phone (an adult phone company that was... popular).
    This means, then, that the financial responsibility for covering fraud falls on banks, not consumers. Even if consumers wereto pay the first $50 in fraud charges to their account, a bank still has to provide the personnel to investigate fraud. Fraud / Loss Control is a very important part of the agenda of most banks.

    Now, mind you, it is going to be rather difficult for banks to institute a 'merchant-blocking' system in your account. This is because of several reasons:

    • Legacy systems The software these banks use is, for the most part, ancient, unnecessarily complex, and misdesigned. It's not surprising to have to access anywhere from three to five different systems just to work one account. Overhauling something this size to implement a charge-blocking mechanism is going to be cost-prohibitive, at least until a new system is set up.
    • Credit card users There's enough confusion with users about their credit cards. I've received calls from people wanting to talk directly to "Mr. Visa" and people who have a Gas Card with Exxon, not a MasterCard with First National Example Bank. Blacklisting merchants adds to this, and whitelisting merchants would be a nightmare. It's hard enough for some of them to remember their address, let alone which merchants they allow to charge their account.

    Currently, the system really isn't all that bad. There's a lot of nightmares, certainly, with the major credit reporting bureaus (TransUnion, etc.), but the average national, well-established credit card bank is on yourside when it comes to fraud, mainly because essentially it's their money and their business that's being affected.

    The best thing you can do to prevent fraud to your account is basic common sense: Guard your number. Don't trust every merchant online (for the same reasons you wouldn't trust every offline merchant). And, if you are the victim of fraud, report it as soon as possibe to the bank and, for your sake, write down and save everything. Amounts, dates, times, names of people you talked to. The more informed you are as a consumer the easier it is for the banks to help you.

    Finally, remember that there are a lot of reputable adult merchants out there. One time we had an older woman call in saying that there were $150 in calls to an adult service. She said she lived alone and would not make such calls. Sure enough, it wasn't her. We called the adult service, they still had the caller's number on record, as well as the time of the call. It happened one time while her 12-yr old grandson was visiting for a few days.

  • by Mike1024 ( 184871 ) on Sunday July 23, 2000 @12:00PM (#911752)
    Hey!

    If I ran a credit card company, I'd have options of:

    1) All merchants
    2) All merchants except blacklisted
    3) No merchents except whitelisted
    4) Authorise

    You'd have a choice, a normal credit card, a credit card that couldn't be used at companies that had a record of mischarging customers, a credit card that only works at popular shops that have a good trade record, and a card where you telephone before buying anything and say 'I'd like to authorise 'Jon's Pr0n-o-rama' to take $15 per month from my card', or 'I'm going shopping. I'd like to authorise the spending of $150 on my card, within the next 2 hours'.

    This could be a good cash safety feature, or it could just be annoying... more likely annoying, after a while.

    Some peer review might be in order?

    Michael Tandy


    ...another insightless comment from Michael Tandy.
  • Yes, this would be a crime. Taking funds with no intention of providing anything in return and hoping to exploit embarrassment so as to keep the funds is definitely an offence of deception.

    No, it wouldn't work. It's perfectly simple to present a cheque for payment without having to meet someone in person: in the UK, we have automated deposit boxes that are quite anonymous. Since the poor sods who process the cheques haven't time to read much more than the amount written on them, they aren't going to even notice that the cheque is drawn on an embarrassingly-named account.

    And even if they did, they're processing a cheque every second and a half or similar, so they don't even have time to snigger even if they do notice - and anyway, they don't know the poor sap who's presenting the cheque for payment anyway.

  • ... is a humorous exploit of the banks' (and I mean all of them) policy regarding the relative cost of policing cheque signatures as against the cost of processing and paying claims.

    A cheque without a valid signature ought not to be paid, and the bank is liable if it does pay it. On the other hand, most cheques are properly drawn - the vast majority of their customers are honest and careful with their cheques.

    So they don't trouble to check signatures. That means the operator only needs to read off and type the amount on the cheque, and can do forty cheques a minute. Anything more, and the rate would drop and more people would have to be employed and paid for.

    So try this next time you're collecting your poker debts: offer a double or nothing bet that a cheque signed "D. Duck" or similar will clear. Easy enough to do - the mark writes the cheque for double the amount and you agree that if it's queried you won't quibble. The odds are thousands to one against you losing - the bank reckons that a few claims each year are going to be cheaper than hiring four or five times the number of people to clear cheques.

ASHes to ASHes, DOS to DOS.

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