How the global subscription fraud network can be traced back to Montreal
A Montreal-based marketing company is at the core of a plan involving a huge network of streaming media sites that defrauded thousands of Internet users for a total of hundreds of millions of dollars and promised free and unlimited access to high-quality content they don’t provide. , A survey by Radio Canada found.
These sites are operated by a Barbados company called Hyuna International, which provides users with access to movies, books and music.
Users are attracted to these sites through false promises and misleading advertisements. Subcontractors charge commissions from AdCenter, an online marketing company that has a stylish and modern office in downtown Montreal, and investigates false information undermining plans. Decryptor Established.
The investigation revealed that both AdCenter and Hyuna International are associated with Canadian businessman Philip Keezer. According to sources and experts cited in the report, the network uses a complex network of hundreds of almost identical websites and offshore shell companies to evade censorship.
AdCenter is an affiliate marketing company, a legal and widespread practice. In this type of marketing, partners called affiliates promote goods and services and receive a commission every time a customer they recommend makes a purchase. Affiliated companies are not employees, but subcontractors.
Unlike other affiliate marketing companies, AdCenter has only one customer: Hyuna International. Its affiliates will only get paid when they persuade someone to use their credit card information to register on one of Hyuna’s websites.
Automatic billing starts after the 5-day trial period
Misleading ads posted by AdCenter affiliates mostly appear in Google search results when people search for free movies, live sports, or e-books.
The investigation found that these sites contained fake video players or download buttons, which made users mistakenly believe that they got what they wanted, and instead led them to the registration page. All users have to do — or they are forced to think — is to provide their credit card information to start a free trial to access all the content they might want.
However, hidden in the rules is a problem: after the five-day trial period, if users forget to unsubscribe, they will automatically be charged $49.95 per month. According to former employees, although most people canceled their membership after noticing that the site’s library was actually full of B-rated movies and public domain works, some people forgot to cancel and pay for months or even years. .
They said that these forgotten subscriptions are the core of the network’s business model, bringing it at least tens of millions of dollars in revenue every year.
“basically, [we were] It’s just making money from people who haven’t noticed,” said one of more than 15 former employees interviewed by Radio Canada, who requested anonymity because they were afraid of being sued by their former employers for talking to reporters.
“It’s impossible for people to pay a monthly fee for this content. Just imagine a very bad Netflix…but movies are things you’ve never heard of, you won’t even find things behind Blockbuster, such as it’s really weird Thing.”
Many former executives of various companies on the network posted posts on LinkedIn advertised annual revenue of 100 million U.S. dollars, and this figure has been confirmed by many former employees.
“A lot of people just pay credit card bills and don’t really pay attention to them,” said Steve Baker, an international investigation expert at the Better Business Bureau. “Sometimes, they go for months and months:’What the hell is this? I didn’t even realize I was paying.'”
Baker wrote a report on subscription scams in 2018. He stated that many successful scams based on free trial offers rely on this strategy.
Use DomainTools, a network analysis service, Decryptor Able to piece together a network of more than 1,100 websites created by Hyuna International.
According to data from Similarweb, a website that analyzes network traffic, these websites will generate an average of 32.4 million visits per month in 2020. According to Similarweb’s estimates, this is close to 10% of the 331 million visits to Disney+ in March 2021.
Over the years, thousands of complaints about these sites have been posted online.
Decryptor Checked 642 comments on five Hyuna International websites published on Trustpilot from 2015 to 2021: Geeker, Lilplay, Tzarmedia, Iceboxfun and Funmanger.
Almost half contain variations of the words “fraud,” “fraud,” or “theft,” and the vast majority of people who post mentioned that their credit card received unnecessary charges. More than 95% of people gave a one-star rating, which is the worst rating.
Without specifically mentioning the thousands of negative comments on Hyuna’s streaming media site, Keezer condemned the existence of anonymous complaint sites in a blog post on his personal website about “fraud complaints”.
In it, he said, “Consumers and competitors can vent their dissatisfaction through a large number of online channels, which creates a hotbed for fraud,” and claimed that competitors and dissatisfied customers sometimes turn to these websites to post “fraud accusations and outright defamation activities. “. .”
Use open source survey technology, Decryptor It was discovered that the false advertisements that sent users to these sites were produced by a subcontractor called AdCenter, an affiliate. These branches operate in countries such as Bangladesh, Indonesia, and Pakistan and charge a commission every time someone is persuaded to sign up.
In order to recruit subscribers, these affiliated companies also created fake social media accounts to promote contests and events aimed at attracting users to visit Hyuna’s website. For example, a fake celebrity profile will promote a $10,000 jackpot contest, and users who try to participate will be told that they need to sign up for a free trial on Hyuna’s website to qualify.
March, Canadian Broadcasting Corporation Report The identities of dozens of indigenous artists and businesses in Canada and the United States were stolen online by crooks. Decryptor It was discovered that AdCenter affiliates were behind at least two of these cases.
The company denies the allegations
In the past few years, similar scams operated by AdCenter affiliates have been reported in many countries, including the United States and Norway. Celebrities such as talk show host Ellen Degeneres and basketball star Lebron James have been impersonated.
On the surface, AdCenter prohibits its affiliates from using deceptive practices to increase traffic.
however, Decryptor Many instances of AdCenter employees were found to encourage affiliated companies to adopt these strategies by default.
In fact, our reporter could not find an example where an affiliate promoted the Hyuna platform by advertising the movies actually available in the company’s multimedia library.
In one case, a company representative in Montreal provided an affiliate with a list of movies still showing in theaters, telling them to “push” these movies to be “sold” in a Facebook live video posted on the AdCenter page in the summer of 2019 .
In another article, an affiliate marketing manager from Indonesia posted a Facebook post telling the affiliate company to promise users that they can watch live professional sports events by registering on Hyuna’s website-even a link to fake video playback The links to the browser and the fake streaming website templates they can use to deceive them.
Keezer and the companies connected with him did not answer from Decryptor.
An attorney for Action Media, another company representing AdCenter, said Decryptor The story is “false and slanderous”.
What the law says
Expert told Decryptor The Competition Agency of Canada is capable of investigating companies related to the program under the competition law that prohibits false and misleading advertising.
“The law requires businesses not to make false or misleading statements. Therefore, if you are tempted by your favorite superhero movies after being told that you can watch through registration, and in the end, you are only given a large number of movies that have nothing to do with the promise, I think this Is suspicious,” said Sylvie De Bellefeuille, a lawyer with Quebec consumer rights organization Option Consommateur.
Although affiliate marketing is a common and legal online practice, it can sometimes be used by businesses who wish to separate from misleading advertising.
However, a spokesperson for the Competition Bureau declined to comment on this specific case. He told Decryptor The company is ultimately responsible for their marketing activities.