Companies settle charges they used fake Web site scheme to exploit post-Sept. 11 patriotism

WASHINGTON (AP) _ Four companies agreed to repay customers a total of $300,000 to settle federal charges that they sold fake Internet addresses ending in ``.usa'' with an advertising campaign pegged

Tuesday, December 3rd 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ Four companies agreed to repay customers a total of $300,000 to settle federal charges that they sold fake Internet addresses ending in ``.usa'' with an advertising campaign pegged to the Sept. 11 terrorist attacks.

The Federal Trade Commission said Tuesday that the companies _ TLD Network Ltd., Quantum Management Ltd., TBS Industries Ltd., and Quantum Management U.S. Inc. _ last year jointly sold Internet domain names ending with ``.brit'' and ``.scot.'' After Sept. 11, the companies began an e-mail campaign advertising ``.usa'' domain names, with statements such as, ``Be Patriotic! Register .USA Domains.''

The FTC said the ``.usa'' domain names are not usable over the Internet and probably never will be. Many new Internet suffixes have joined the familiar ``.com,'' ``.net'' and ``.org,'' but not the names sold by the four companies.

The settlement bars the companies, primarily based in London, from deceptive promotions involving domain names and from selling their customer lists, the FTC said.

An attorney for the companies did not immediately return calls seeking comment Tuesday. By settling, the companies don't admit breaking any law.

The FTC complaint, filed last February with the U.S. District Court for the Northern District of Illinois in Chicago, argued the companies violated federal law by misleading consumers, many of whom purchased multiple domain names for $59 each. The FTC said the operation made at least $1 million in sales.

While three of the companies are British, they did business in the United States and are subject to U.S. law.

The government lawsuit said the companies used Web sites and advertising that looked professional and hid their location from consumers, making it nearly impossible to get refunds.

U.S. District Judge James Holderman on Feb. 28 issued a temporary restraining order that froze the companies' U.S. assets and shut down their ``DotUSA'' Web site.