Bedford firm pulls plug amid complaints
By MARK HAYWARD
Union Leader Staff
A Bedford-based company linked to the purported hijacking of hundreds of computer modems has suspended operations and is undertaking a legal self-examination, its lawyer said yesterday.
Premier Premium Communications and several sister companies have been the target of hundreds of complaints from consumers who say they have received bills for Internet-related services and long-distance calls they never authorized.
Modem hijacking occurs when a dialer enters a computer via spyware, disconnects the modem from the owner's Internet service provider, then dials and links to a premium Internet service.
A review initiated by the New Hampshire Attorney General's Office has since been turned over to the U.S. Attorney in Concord. And the Better Business Bureau in New Hampshire has forwarded complaints it has received about Premier Premium to the Federal Trade Commission.
"The companies have suspended doing business, and we're undergoing a legal audit with them," said Jennifer Rood, a Manchester lawyer with Bernstein, Shur, Sawyer and Nelson, the company's attorney. The company sends out 15,000 invoices a week, according to a press release issued last month.
"The bills in the pipeline people who have complaints or disputes, those will be addressed," Rood said. "If they don't (have a dispute), the bills that are out there need to be paid."
Rood said the company has not heard from the U.S. Attorney's Office.
She confirmed that Michael Walczak is the principal of Premier Premium. Walczak is a 2000 graduate from Manchester West High School and uses his parent's Horizon Drive address in Bedford as his business address. He graduated from Daniel Webster College last year with a degree in information systems.
John Zahr, a class officer of the West 2000 class, said Walczak was a smart kid who took advanced-level classes.
"All I could really tell you, without trying to sound too harsh, was that he was perceived as your stereotypical high school 'nerd,' if you will," Zahr said in an e-mail message.
A request for an interview made through Walczak's father, a Manchester physician, was not answered. Rood said Walczak does not want to be interviewed.
Starting in November, computer users began notifying consumer protection agencies after receiving bills from Premier Premium and sister companies National One Telecom and One Web Direct.
The bills, often demanding payment of hundreds of dollars, represented entertainment fees charged by pay-per-view Web sites. The consumers were also billed by their long-distance carriers for connections to a telephone number in the United Kingdom.
Consumers posting complaints on ripoffreport.com said the unauthorized calls were often made when they were sleeping, away from home or when the computer was not in use. According to the Federal Trade Commission, a hijacked modem will dial numbers without user prompting, initiating the long-distance charge and the entertainment fee.
Some consumers said they reached Premier Premium after numerous attempts and credit was issued, especially when they threatened action such as reporting the company to the FTC.
In a press released issued through a Maine public relations agency last month, Premier Premium said modem hijacking is illegal and the company is not involved in it.
"Premier Premium is not responsible for or connected in any way to this activity," the company said in a press release dated Dec. 13.
The United Kingdom Web sites are not the company's clients nor under the company's control, the company said. It also said "a technical issue" in late October resulted in a sudden increase in the number of calls in November. It said billing disputes sent in by mail are usually given credits.
In the press release, the company said it is owned by an investor group in New Hampshire and it sends out 15,000 invoices a week. It said only 4 percent are contested, which is below the national average.