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.