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A Montreal-based marketing firm is at the heart of a scheme involving a massive network of streaming websites that has scammed thousands of internet users for small sums totaling hundreds of millions of dollars with promises of free access and unlimited to premium content they don’t offer. , revealed an investigation by Radio-Canada.
The websites are operated by a Barbados company 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 set up by commission-earning contractors from AdCenter, a web marketing company run from sleek and modern offices in downtown Montreal, the investigation conducted by the anti-disinformation program Decryptors find.
The investigation revealed that AdCenter and Hyuna International are linked to a Canadian businessman, Philip Keezer. This network uses a complex web of hundreds of nearly identical websites and offshore shell companies to escape scrutiny, according to sources and experts cited in the report.
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 each time a customer they refer makes a purchase. Affiliates are not employees, but rather contractors.
Unlike other affiliate marketing companies, AdCenter has only one customer: Hyuna International. Its affiliates are only paid when they convince someone to use their credit card information to sign up for one of Hyuna’s sites.
Automatic billing begins after the 5 day trial period
Deceptive ads posted by AdCenter affiliates mostly appeared in Google results when people searched for free movies, live sports, or e-books.
These sites contained fake video players or fake download buttons that tricked users into thinking they were getting what they wanted, but instead took them to a sign-up page, the survey found. All users had to do – or at least be made to think – was provide their credit card information to start a free trial to access all the content they could possibly want.
Buried in the fine print, however, there’s a catch: After the five-day trial period, if users forget to unsubscribe, they’re automatically billed $ 49.95 per month. While most cancel their memberships upon finding that the site’s library is in fact filled with B-movies and public domain works, some forget to cancel and are billed for months or even years, according to former employees.
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They say these forgotten subscriptions are at the heart of the network’s business model, which earns it at least tens of millions of dollars a year.
“Essentially, [we were] just make money with people who don’t notice it, ”said one of the more than 15 former employees Radio-Canada spoke to who asked not to be identified because he was afraid of being sued by his former employer for speaking to journalists.
“There’s no way people are paying a monthly fee for this content. Just imagine a really crappy Netflix… but movies are things you never heard of, things you wouldn’t even find in the back of a Blockbuster, like really weird things. “
The LinkedIn posts of several former executives at the various companies in the network show annual revenue of $ 100 million, a figure confirmed by a number of former employees.
“A lot of people just pay their credit card bills and don’t really look at them,” said Steve Baker, International Investigations Specialist at the Better Business Bureau. “Sometimes months and months go by before they’re like, ‘What is this? I didn’t even realize I paid for that. ‘ “
Baker, who wrote a report on subscription scams in 2018, said many successful scams based on free trial offers rely on this tactic.
The Montreal connection
By using DomainTools, a web analytics service, Decryptors has been able to build a network of over 1,100 websites created by Hyuna International.
According to data from Similarweb, a website that analyzes web traffic, these websites averaged 32.4 million visits per month in 2020. That’s almost 10% of the 331 million visits to Disney + in March 2021. , according to estimates by Similarweb.
Thousands of complaints about these websites have been posted online over the years.
Decryptors reviewed 642 reviews posted on Trustpilot from 2015 to 2021 across five of Hyuna International’s websites: Geeker, Lilplay, Tzarmedia, Iceboxfun and Funmanger.
Almost half contain variations of the words “scam”, “fraud” or “theft” and the vast majority of people who publish articles report receiving unwanted charges on their credit cards. Over 95% of them gave a rating of one star, the worst rating.
Without specifically referring to the thousands of negative reviews of Hyuna’s streaming sites, Keezer exposed the existence of anonymous complaint websites in a “complaint scams” blog post on his personal website.
In it, he said that “the abundance of online channels through which consumers and competitors can voice their frustrations has created fertile ground for fraud” and alleged that competitors and dissatisfied customers sometimes turn to these websites to publish “fraudulent accusations and outright smear campaigns.” . “
Using open source forensic techniques, Decryptors found that the bogus ads sending users to these sites were created by subcontractors of AdCenter called affiliates. These affiliates, operating in countries like Bangladesh, Indonesia, and Pakistan, pay a commission every time they convince someone to sign up.
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 a $ 10,000 jackpot, and users attempting to enter will be notified that they must register for a free trial on one of the sites. Hyuna in order to be eligible.
In March, CBC reported that dozens of Indigenous artists and businesses in Canada and the United States have had their online identities stolen by con artists. Decryptors found that AdCenter affiliates were responsible for at least two of these cases.
Company denies allegations
In recent years, similar scams carried out by AdCenter affiliates have been reported in various countries, such as the United States and Norway. Celebrities such as talk show host Ellen Degeneres and basketball star Lebron James were among those emulated.
On paper, AdCenter prohibits its affiliates from using deceptive practices to generate traffic.
however, Decryptors found numerous instances where AdCenter employees tacitly encouraged affiliates to use these tactics.
In fact, our reporters couldn’t find a single instance where affiliates promoting Hyuna platforms did so by promoting movies that were actually available in the company’s media library.
In one case, a representative from a Montreal company gave affiliates a list of films still showing in theaters, telling them to “push” those films to “make sales” in a Facebook live video posted. in the summer of 2019 on the AdCenter page.
In another, an affiliate manager from Indonesia posted a post on Facebook telling affiliates to promise users that they could watch professional sporting events live by registering on Hyuna’s sites – and even included a link to a fake video player and a fake streaming site template they could use. to fool them.
Keezer and the various companies associated with him did not respond to interview requests from Decryptors.
A lawyer representing Action Media, another AdCenter company name, called the allegations in the Decryptors “false and downright defamatory” story.
What the law says
Experts said Decryptors that the Competition Bureau of Canada is well equipped to investigate companies linked to this scheme on the basis of the Competition Act, which prohibits false and misleading advertising.
“The law says traders are not allowed to make false or misleading statements. So if you’re drawn to your favorite superhero movie after learning you can watch it by signing up, and in the end all you’re given is a ton of movies that have nothing to do with it. to see with what was promised, I think it is suspect, declared Sylvie De Bellefeuille, lawyer Quebec for the group of defense of the consumers Option Consommateur.
Although affiliate marketing is a common and legal practice online, it can sometimes be used by marketers looking to disassociate themselves from deceptive advertisements.
However, a spokesperson for the Competition Bureau, who declined to comment on this specific case, said Decryptors that businesses are ultimately responsible for their marketing campaigns.