How the global subscription scam network was traced to Montreal

How the global subscription scam network was traced to Montreal

A Montreal-based marketing company is at the heart of a plan that includes a massive network of streaming sites that have captured thousands of Internet users for small amounts totaling hundreds of millions of dollars with promises of unlimited free access to premium content that they don’t have for you. Find bids and search from Radio Canada.

These sites run a company in Barbados called Hyuna International and give users access to movies, books, and music.

Users were drawn to those sites by false promises and deceptive ads generated by subcontractors collecting commissions from AdCenter, an Internet marketing company with its sleek, modern offices in downtown Montreal, and an investigation by a disinformation breach program. decoders have found.

Research has revealed that both AdCenter and Hyuna International have ties to Canadian businessman Philip Keizer. This network uses a complex network of hundreds of nearly identical websites and third-party fake companies to avoid scrutiny, according to the sources and experts cited in the report.

AdCenter is an affiliate marketing company and is a pervasive legal practice. In this type of marketing, partners called affiliate partners promote goods and services and receive a commission every time a customer they refer makes a purchase. Branches are not employees, but subcontractors.

Unlike other affiliate marketing companies, AdCenter has only one client: Hyuna International. Their affiliates only pay when they convince someone to use their credit card information to sign up for one of Hyuna’s sites.

AdCenter is headquartered at 2000 Bell Street in downtown Montreal. (Evano Demers/Radio Canada)

Automatic billing starts after a 5-day trial period

Deceptive ads placed by AdCenter affiliates often appear in Google 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 that tricked users into believing they were getting what they wanted, but instead led them to a registration page. All users had to do – at least this made them think – was provide their credit card information to start a free trial to access all the content they wanted.

The fine print is an issue, though: if users forget to opt out after the five-day trial, they’ll be charged $49.95 per month automatically. While most cancel their membership if they find the site’s library is already full of B-quality films and public domain works, some forget to cancel and are charged for months or even years, according to former employees.

View | Deceptive ads send the user to a site that does not contain content:

In this example of a deceptive ad created by AdCenter, it appears that a fake player starts playing the 1984 Wonder Woman movie, but asks the user to create an account to continue watching, then sends them to a site operated by Hyuna International that doesn’t have that movie. 0:19

They say these forgotten subscriptions are the core of the network’s business model, making at least tens of millions of dollars a year.

In Principe [we were] One of the more than 15 former employees that Radio Canada spoke to said they did not want to be identified because they feared they would be charged by their former employer for speaking to reporters.

“There is no way people pay a monthly fee for this content. Imagine Netflix is ​​really bad…but movies are things you’ve never heard of, things you wouldn’t even find in the back of a huge movie, like really weird stuff.”

The revenue of LinkedIn posts from several former executives at various networking companies is $100 million, a figure confirmed by a number of former employees.

“A lot of people pay their credit card bills and don’t really look at them,” said Steve Baker, international research specialist at the Better Business Bureau. “Sometimes months and months go by before they go, ‘What the hell is this?’ “I didn’t even know I was paying this.”

Baker, who wrote a report on subscription scams in 2018, said that many successful free trial scams rely on this tactic.

Montreal Connection

With DomainTools, a web analytics service, decoders I managed to build a network of more than 1,100 websites created by Hyuna International.

According to data from a comparable site, a site that analyzes web traffic, these sites generated an average of 32.4 million visits per month in 2020. That’s nearly 10 percent of the 331 million visits to Disney+ in March 2021, according to Disney estimates. +. similar.

Philip Keizer left and participated in the 59th Annual Grammy Awards in Los Angeles in 2017. (Twitter)

Thousands of complaints about these sites have been posted online over the years.

decoders It examined 642 reviews published on Trustpilot from 2015 to 2021 on five international Hyuna websites: Geeker, Lilplay, Tzarmedia, Iceboxfun and Funmanger.

Nearly half of them contain variants of the words “fraud,” “fraud,” or “theft,” and the vast majority of people who post have stated that they received unwanted fees on their credit cards. More than 95 percent of them gave a one-star rating, the worst rating.

Without specifically mentioning Hyuna’s thousands of negative reviews of streaming sites, Keezer denounced the presence of anonymous complaint sites in a blog post about “fraud” on his personal website.

It said the “multiplicity of online channels through which consumers and competitors can express their frustration has created a breeding ground for fraud” and claimed that competitors and disgruntled customers sometimes turn to these sites to spread “fraudulent accusations and outright defamation campaigns”. . “

Using open source research techniques, decoders It found that the fake ads that send users to these sites were generated by subcontractors of AdCenter affiliates. These affiliates operate in countries like Bangladesh, Indonesia, and Pakistan, and they charge a commission every time you convince someone to sign up.

Hyuna International is headquartered in Christ Church, Barbados. (The social networking site Facebook)

In an effort to gain subscribers, these affiliates also create fake social media accounts to promote contests and events aimed at attracting users to Hyuna’s websites. For example, a fake celebrity profile will advertise a contest for the highest prize of $10,000, and users trying to get in will be required to sign up for a free trial on one of Hyuna’s websites to be eligible.

in March , called CBC Scammers stole dozens of Aboriginal artists and companies in Canada and the United States. decoders I’ve found that AdCenter affiliates are behind at least two of these cases.

Screenshot of Tara Kiwenzie Designs fake account and message to scammers for new followers asking for bank details. (Provided by Tara Quincy)

The company denies these allegations

In recent years, similar scams have been reported by AdCenter affiliates in many countries, such as the United States and Norway. Celebrities such as talk show host Ellen DeGeneres and basketball star LeBron James were among those who impersonated them.

On paper, AdCenter prohibits its affiliates from using deceptive traffic redirection practices.

However, decoders I have found many cases where AdCenter employees implicitly encourage partners to resort to these methods.

In fact, our reporters were unable to find a single case where affiliates promoting Hyuna’s platforms did so by promoting films already available in the company’s multimedia library.

In one case, a representative of a Montreal company gave his partners a list of films still showing in theaters, and asked them to “push” those films to make “sales” in a Facebook Live video posted to the AdCenter page in summer 2019.

In another case, an affiliate manager from Indonesia posted a message on Facebook telling its affiliates to promise users that they can watch live professional sports events by subscribing to Hyuna sites – and even a link to a fake video player and a fake video. It can be used to deceive them.

Keizer and its various subsidiaries did not respond to interview requests from decoders.

A lawyer representing Action Media, another company name for AdCenter, cited the allegations in decoders The story is “frankly false and defamatory”.

What is the opinion of the law?

The experts said: decoders The Canadian Competition Bureau is well-equipped to investigate companies linked to this scheme under competition law, which prohibits false and misleading advertising.

The law states that merchants may not make false or misleading statements. So if you’re tempted by your favorite superhero movie after I tell it, you can watch it by subscribing, and in the end all you’ll get is the chance to do it, Quebec attorney Sylvie de Belleville told Choice Group. Conssommateur Consumer Advocate A whole series of films that have nothing to do with what he promised, I find strange.

While affiliate marketing is a common and legal practice online, it can sometimes be used by merchants who wish to isolate themselves from misleading advertisements.

Competition Bureau spokesman, who declined to comment on this particular case decoders That companies are ultimately responsible for their marketing campaigns.

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