Federal regulators settled a case Thursday against three Utah-based companies that swindled tens of thousands of "American Idol" fans during the 2002 and 2003 television broadcast seasons.
The three companies — Telemarketing Inc., also doing business as Univoxx; Apex Investments, doing business as Operator Directory Service and Northwestern Atlantic; and Universal Innovations — bought more that 100 toll-free phone numbers that were similar to the toll-free numbers that "American Idol" viewers were directed to dial to vote for their favorite contestants during the show's 2002 and 2003 seasons, according to Federal Trade Commission spokesman Mitchell Katz.
Viewers who misdialed the "American Idol" number and got one of the "copycat" numbers were then led to believe they had to dial a 900 number to place their votes, and that they had to pay a fee of up to $2.99 per call. When callers dialed the 900 number, however, a pre-recorded message referred them back to the correct toll-free number.
Attempts to contact the companies for comment were unsuccessful.
However, Katz said, none was affiliated with "American Idol." About 25,000 consumers fell victim to the scheme during the two broadcast seasons, he said.
As part of the settlement, the companies (including various officers and executives, named individually in the FTC's complaint) agreed to pay a $40,000 civil penalty and refrain from future FTC violations.
"We've seen several cases in the last five years involving this type of practice," Katz said. "But I'd say that this is certainly the most high-profile case we've seen."
Even so, the scheme wasn't a big money-maker, he said.
"I think fraudsters will try anything that will make them money. In this case, it worked until we found out about it — but even then, they'd been operating for two whole seasons and only made about $40,000," Katz said. "That's not enough to make this worth it, that's for sure."
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