Xpics advertised its services via unsolicited e-mails and internet banner advertisements and enticed users into revealing credit card details by offering them the opportunity to view its site for free. The information was used to make false billings to individuals' accounts.
Although the company offered users the option to cancel their accounts, in reality this was made virtually impossible by a series of technical measures that prevented access to the relevant cancellation web pages. Alternative methods of cancellation including telephone and e-mail services were equally inaccessible.
The individuals responsible for Xpics’ actions will have to reimburse all users that were improperly billed and they have agreed to post ‘clear and conspicuous’ explanations of their billing procedures on the web site.
Despite the actions being in breach of federal law, it appears that there will be no further punishment by the FTC.