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New Millennium Settles FTC Suit

New Millennium Concepts Inc., charged by the Federal Trade Commission (FTC) with conning consumers into paying membership fees and turning over sensitive personal and financial information through deceptive claims that it would pay for their Internet access, agreed to a settlement Wednesday.

The settlement bars New Millennium Concepts, which did business as rhinoPoint, and its principal, Karl V. Kay, from making misrepresentations in advertising, promotion, or sale of any products or services. It also bars the company and Kay from collecting or disclosing personal information obtained by misrepresentations, and ordered the company to delete or destroy any personal identifying information it collected from consumers within 30 days.

The FTC brought the case against New Millennium and Kay in U.S. District Court in the Northern District of Illinois in Chicago on May 23. On June 1, the court approved a preliminary injunction which froze New Millennium's and Kay's assets, prohibited misrepresentations and barred the use of consumer data, pending trial.

The FTC alleged the company operated a Web site that offered to pay Internet access fees for consumers that became part of its "network" and paid a one-time "set-up" fee of between $10 and $16. Joining the network required completing a questionnaire with detailed personal information. The consumers also agreed to complete monthly marketing surveys. After signing up, consumers were asked to complete "member profile forms" that requested information including credit card numbers and income level.

The site's privacy policy claimed, "We do not sell or provide individual names, addresses, phone numbers, credit information or other personal contact information to outside parties under any circumstances."

The FTC said that no consumer redress has been ordered, based on financial documents provided by New Millennium and Kay. However, the commission said that if that financial information is inaccurate, the court will order a judgment of $481.172.05 -- the amount of consumer injury -- against Kay.

The settlement includes a provision giving the FTC the ability to monitor compliance with the settlement.