A Montreal-based marketing firm is at the center of a plan that involves a massive network of streaming sites that have defrauded thousands of internet users with small sums totaling hundreds of millions of dollars with promises of free access and unlimited to premium content they don’t have. to have. t bid and A Radio Canada search found.
These sites operate a business in Barbados called Hyuna International and provide users with access to movies, books, and music.
Users have been drawn to these sites by false promises and deceptive advertisements created by commission-earning contractors from AdCenter, an internet marketing company that has its sleek, modern offices in downtown Montreal, and a survey conducted by the Disinformation Breach program. decoders to have found.
Research has revealed that AdCenter and Hyuna International have ties to Canadian businessman Philip Keizer. This network uses a complex web of hundreds of almost identical websites and bogus offshore companies to avoid scrutiny, according to the sources and experts named in the report.
AdCenter is an affiliate marketing company and it is a widespread legal practice. In this type of marketing, partners called affiliates promote goods and services and receive a commission each time a customer they refer makes a purchase. Affiliates are not employees, but contractors.
Unlike other affiliate marketing companies, AdCenter has only one customer: 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.
Automatic billing starts after a 5 day trial
Deceptive ads placed by AdCenter affiliates often appeared in Google results when people searched for free movies, live sports, or e-books.
The investigation found that these sites contained bogus video players or download buttons that tricked users into believing they were getting what they wanted, but instead took them to a sign-up page. All users had to do – at least it got them thinking – was provide their credit card information to start a free trial to access all the content they wanted.
However, the fine print is a problem: If users forget to unsubscribe after the five-day trial period, they’ll automatically be billed $ 49.95 per month. While most cancel their memberships if they find that the site’s library is already full of B-quality movies and public domain works, some forget to cancel and are billed for months or even years, according to alumni. employees. .
They say these forgotten subscriptions are at the heart of the network’s business model, amounting to at least tens of millions of dollars a year.
” in principle [we were] One of the more than 15 former employees CBC spoke to said he did not want to be identified because he feared he would be charged by his former employer for speaking to reporters.
“It’s impossible for people to pay a monthly fee for this content. Imagine a really bad Netflix… but movies are things you never heard of, things you wouldn’t even find on the back of a blockbuster, like really weird stuff ”.
The LinkedIn posts of several former executives of various networking companies have an annual turnover of $ 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 wonder ‘What is this?’ I didn’t even know I was paying for this. “
Baker, who wrote a report on subscription scams in 2018, said many successful free trial scams rely on this tactic.
With DomainTools, a web analysis service, decoders He has successfully established a network of over 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. This represents almost 10% of the 331 million visits to Disney + in March 2021 , according to Disney + estimates. similar.
Thousands of complaints about these sites have been posted online over the years.
decoders He reviewed 642 reviews posted on Trustpilot from 2015 to 2021 across five Hyuna International websites: Geeker, Lilplay, Tzarmedia, Iceboxfun, and Funmanger.
Almost half of them contain variations of the words “fraud”, “fraud” or “theft” and the vast majority of people who post have reported receiving unwanted charges on their credit cards. Over 95% of them gave a one star rating, which is the worst rating.
Without specifically mentioning Hyuna’s thousands of negative ratings on streaming sites, Keezer denounced the presence of anonymous complaint sites in a blog post about “scams” on his personal site.
He said that “the multitude of online channels through which consumers and competitors can voice their frustrations has created fertile ground for fraud” and claimed that competitors and disgruntled customers sometimes look to these sites to broadcast. ” fraudulent accusations and outright smear campaigns “. . “
Using open source research techniques, decoders He found that the bogus ads that send users to these sites were created by subcontractors from AdCenter affiliates. Operating from countries like Bangladesh, Indonesia, and Pakistan, these affiliates charge a commission every time they convince someone to sign up.
In an effort to gain subscribers, these affiliates are also setting up 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 a top prize of $ 10,000, and users who attempt to enter will be invited to sign up for a free trial on one of Hyuna’s sites for be eligible.
in March , called CBC Dozens of Indigenous artists and businesses in Canada and the United States have had their online identities stolen by fraudsters. decoders I have found that AdCenter affiliates are behind at least two of these cases.
Company denies allegations
In recent years, similar scams by AdCenter affiliates have been reported in several countries, such as the United States and Norway. Celebrities such as talk show host Ellen DeGeneres and basketball star LeBron James were among those impersonating them.
On paper, AdCenter prohibits its affiliates from using deceptive practices to redirect traffic.
however, decoders I found many instances where AdCenter employees implicitly encouraged partners to use these tactics.
In fact, our reporters did not find any instances where affiliates promoting Hyuna’s platforms did so by promoting films already available in the company’s media library.
In one case, a representative from a Montreal company provided partners with a list of films still in theaters, asking them to “push” those films to make “sales” in a Facebook Live video. published in was published on the AdCenter page in the summer of 2019.
In another case, an affiliate manager from Indonesia posted a Facebook post telling affiliates to promise users that they can watch professional sporting events live by subscribing to Hyuna sites – and even a link to a fake video player and a fake streaming site template that they can use to cheat them.
Keizer and the various affiliates 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 the law says?
The experts said: decoders The Canadian Competition Bureau is well equipped to investigate companies associated with this scheme under the Competition Act, which prohibits false and misleading advertising.
“The law states that dealers cannot make false or misleading statements. So if you’re tempted by your favorite superhero movie after telling it, you can watch it by subscribing, and ultimately all you get is the chance to get it. do, ”said Quebec lawyer Sylvie de Belleville for the options group. Consumer Consumer Advocate A whole series of films that have nothing to do with what he promised, I find strange.
Although affiliate marketing is a common and legal practice online, it can sometimes be used by marketers who wish to isolate themselves from deceptive advertising.
A spokesperson for the Competition Bureau, who declined to comment on this particular case in particular decoders That companies are ultimately responsible for their marketing campaigns.