FTC Sues Illinois Net Company

WASHINGTON — An Illinois company offering free Internet access scammed customers out of about $500,000 in bogus setup fees, federal regulators alleged Monday.

The site, run by New Millennium Concepts, was called Rhinopoint.com.
Rhinopoint.com encouraged customers to pay a one-time fee ranging from $10 to $16 to join its network. After completing a questionnaire, the customers agreed to complete monthly marketing surveys. In return, they would receive free or reduced-cost Internet service.

The Federal Trade Commission, which is suing the company, said at least 59,000 people enrolled. Many Web sites that warn Internet users about scams have pages dedicated to Rhinopoint.com.

One phone number associated with the company is disconnected. Another number is for an office building where New Millennium Concepts leased space, though they did not leave a forwarding number or address.

Karl V. Kay of Hoffman Estates, Ill., who is named in the suit, couldn’t be located through directory assistance. The Rhinopoint.com address has since been resold to Damir Kruzicevic of Split, Croatia. Kruzicevic said he has no connection with the previous owners.

Julie Johnson, one of Rhinopoint.com’s customers, said America Online recommended Rhinopoint.com to her when she tried to cancel her AOL account last year.

“I didn’t get anything back,” Ms. Johnson, of Orting, Wash., said of Rhinopoint.com. “Not even an e-mail saying that they went out of business.”
Several complaints on scam Web sites said they learned about Rhinopoint.com through an AOL recommendation. AOL Time Warner Inc. (AOL) spokesman Nicholas Graham said AOL has never had a business relationship with Rhinopoint.com.

The FTC alleges that Rhinopoint never followed through on the deal.

“Defendants rarely sent the promised surveys, even more rarely reimbursed consumers for their Internet access costs, but collected initial setup fees and personal information from tens of thousands of consumers anyway,” the suit states.

Federal regulators wants the business stopped, and the company to refund the money. It also calls for a ban on the use of consumers’ personal and financial information.