Integretel to Return Porn Scheme Money, FTC Says

Bill collecting company Integretel Inc. agreed to give up $1.6 million it charged consumers for Internet-based adult entertainment services they never purchased, the Federal Trade Commission said Tuesday.

The FTC said San Jose-based Integretel and its EBillit Inc. unit were involved in an illegal scheme in which customers were billed for adult “videotext” services through the international telephone billing system. Thousands of consumers were billed an average of $127 each.

Integretel spokesman Ken Dawson said the companies billed customers at the request of Verity International Ltd.

“This is consumer money that happened to be sitting in our bank account, so we’re turning it over to the FTC,” he said.

A federal court in New York approved the pact between the FTC and Integretel. The FTC said it will hold the $1.6 million until its civil claims against Verity and its owners are resolved.

The charges appeared on phone bills as an international call to Madagascar, the trade commission said. The civil charges were filed against Verity and its principals in October 2000, the FTC said.

The settlement demonstrates that if billing companies “support fraudulent activities, they will be held responsible for their actions,” said J. Howard Beales, director of the trade commission’s Bureau of Consumer Protection.