iBill Plans to Cover Adult Merchant Debts of Former Company

iBill says it plans to honor all promissory notes issued by the former company of the same name.

With the announcement made over the weekend, the third-party processor also said that it would release a new iBill payment processing, iBill 2.0, that includes a payback option for former iBill merchants.

“I know there are a lot of honest people out there who have waited far too long for this day,“ said Jonas Brown, iBill’s president and CEO. “I’ve received numerous phone calls from former merchants who lost their sites as well as their only source of income. They were forced to turn to friends and family to pay rent and car payments while they waited on payment from iBill.

“These people deserve the money they earned and I’m proud to say we now have a solution to honor those debts,” he said. “Until now, there was no recourse, but earlier today our board approved payback to all merchants who have a valid iBill promissory note.”

Brown said the new iBill 2.0. payment processing system will be up and running April 7, with more details about the program, including a tour, to be revealed April 2 in a series of web conferences.

For the past eight months, the Aurora, Colo.-based processor has been attempting to distance itself from to the defunct Deerfield, Fla., company with the same name that left scores of online adult companies unpaid and hundreds of legal claims unresolved.

Brown, in an interview with XBIZ last year, said that investors scooped up iBill’s trademark after the defunct company let the name expire and then completed an acquisition for the iBill.net domain.

Brown said the new policy announced over the weekend “is our way of saying we understand.”

“It is important that we rebuild our image and establish trust with those who utilize our services,” he said. “This solution will go a long way toward that goal and benefit all parties involved.”

iBill was an internet billing company, founded in 1997 and known in the early 2000s as a top credit card transaction aggregator for adult entertainment websites. It was acquired by InterCept in 2002 and subsequently purchased by Interactive Brand Development in January 2005.

iBill was incorportated as ‘INTERNET BILLING COMPANY, LTD.’ and changed its name to ‘IB HOLDING COMPANY, LTD.’ in 2002. ‘INTERNET BILLING COMPANY, LTD’ was incorporated on 10/23/96 with $990. On 3/19/02 the company filed for total capital contributions of $15,886,000.00. Albert J. Angel is a key person who acted as iBill’s first president.

FROM A March 6, 2006 Article Exposing iBill’s contention that the company was “framed”

Online payment company iBill on Thursday said a massive cache of stolen consumer data uncovered by security experts did not come from its database.

“I’m the first person that would have taken this to the FBI and the first person to have gone on 60 Minutes to say ‘we screwed up,’ if that were the case,” said iBill President Gary Spaniak Jr.

Two caches of stolen data were discovered separately by two security companies while conducting routine research into malicious software online. Both had file names that purportedly linked them to iBill.

Southern California-based Secure Science Corporation found the first data file containing records on 17 million individuals on a private website set up by scammers. The site was part of a so-called “phishing” scheme, in which a spamming fraudster poses as a bank or online retailer in an attempt to con consumers out of identification and financial information.

Secure Science found that data in February 2005, and reported it to the FBI’s Miami field office, the company says. An additional list of slightly over 1 million individual entries was uncovered on a spamming website by Sunbelt Software last month, where it was labeled Ibill_1m.txt. That list appeared to date from 2003.

The databases, examined by Wired News, include names, phone numbers, addresses, e-mail addresses and internet IP addresses of customers making online purchases. Other fields in the compromised databases appear to be logins and passwords, credit-card types and purchase amounts, but credit-card numbers are not included.

But Spaniak says iBill cross referenced the 17 million transaction database against its own on Wednesday, and that only three e-mail addresses matched between the two.

Additionally, some entries in the stolen databases were identified as purchases on Diner’s Club cards, which iBill says it has never accepted in its nine year history. Spaniak says iBill recently passed a security audit that found its databases well secured.

SunBelt Software couldn’t immediately be reached for comment Thursday. But Secure Science’s Lance James backed away from his conclusion that iBill, which processes most of its transactions on behalf of adult services, was the source of the leak. He says pornography transaction databases may be considered especially desirable to spammers, and that a criminal may have deliberately mislabeled a database taken from another source “This might be part of a new hacker establishing their reputation,” says James. “They could say, ‘I hacked iBill.’”

Wired News found that entries from the smaller cache of one million consumers are listed as mortgage leads on a spammer community site, specialham.com. A Google search turns up scores of offers on specialham.com for purported iBill databases, one of them advertising “20mill ibill list w/Full data from 2003″ for $300. But in one message, a spammer slams an underground vendor for selling him a fake iBill list.

Other offers on the site purport to sell data from competing internet billing firm CCBill, which says that it isn’t aware of having been breached either.

Spaniak has his own theory on why a data thief might falsely link a database to iBill. He believes it’s an outgrowth of animosity in the adult website community dating from the time when the trouble-plagued company was forced to suspend payments to its webmaster customers.

He says as long as iBill stays in business, it will try to repay those webmasters. “Over $20 million has been paid back, we have plans for paying back another $18 million.”

James says the actual source of the stolen data remains a mystery. An FBI spokeswoman says the bureau wouldn’t investigate the breach unless the source of the leak comes forward to make a complaint.

Tags: credit card, fraud, iBill