Attorney General's News Release

July 17, 2006

Web, lies and audiotape: Telemarketer caught splicing tapes will repay businesses hit with unauthorized charges

Jefferson City, Mo. — A Texas company that spliced together audiotapes of telemarketing conversations in order to place unauthorized charges on the phone bills of Missouri businesses will pay more than $1,400 total to the state and to those businesses that were defrauded, Attorney General Jay Nixon said today. Nixon said WebXites, based in Houston, fraudulently placed start-up and monthly fees for Web page design services on the phone bills of 23 Missouri small businesses.

Nixon says WebXites' sales representatives would call small businesses and offer them a free 30-day trial period to try the company's services, while informing the recipient of the call that it was being recorded for accuracy. Most declined the sales pitch, but WebXites spliced the calls to create audio tapes that made it appear as though the business expressly authorized the purchase of WebXites services and agreed to have charges for those services placed directly on its phone bill.

WebXites would then send the phony audio tapes to the target business' phone company so that it could charge the $49.95 set-up and monthly fees to the phone bill of the target business without the business' consent. Among the small businesses victimized by the scam were a pizza restaurant, a pharmacy, a business that sells log homes, and a chiropractor.

“This company took the art of telephone fraud to a new level,” Nixon said. “In some cases, the targeted businesses made it perfectly clear that they were not interested in the services that WebXites was providing, but still found these charges on their phone bill. Small businesses have enough challenges in trying to succeed without having to worry about being victimized by such a shameless scam.”

WebXites will pay $406 in restitution to those businesses that had not already had the charges removed. In addition, the consent judgment approved by Jackson County Circuit Judge Charles Atwell prohibits WebXites from charging consumers set-up or monthly fees without proper authorization, or from making misrepresentations to consumers about free trial periods or about how they can cancel services from WebXites.

The company also is paying $1,000 to the state to cover the costs of bringing the lawsuit.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818