At trial, the agency told the court that the site operators
bought access to lists from a California bank that provided the
account numbers for more than 3 million valid Visa and MasterCard
credit cards. Rather than use the lists to confirm that potential
customers had valid cards, the defendants debited the cards for web
site services the cardholders had never used.
In addition to the $37 million in damages, the court judgement
will ban the primary defendant from owning or controlling, holding
a managerial position, serving as an officer, or in a consulting
position for any business that handles consumers' credit or debit
card accounts.
In January 1999, the FTC filed the case against Malibu,
California residents Kenneth and Teresa Taves, and Dennis Rappaport
and their businesses J.K. Publications, Inc., MJD Service Corp.,
Herbal Care, Inc., and Discreet Bill, Inc.
The FTC argued successfully that the defendants illegally used
the account numbers to place charges on the accounts and that over
90 percent of their $49 million a year in "sales" were actually
unauthorised charges.
