Wisconsin Attorney General Targets Snackable Executives
A new lawsuit claims the phone and email services company hoodwinked unwitting customers.
Charges filed by Wisconsin Attorney General J.B. Van Hollen allege that the leaders of a New York company, Snackable Media, violated state trade laws by billing telephone customers for voice mail and discount services they never signed up for. Filed on Monday, the lawsuit targets Eyal Yechezkell, a polished businessman who's appeared on television in the L.A. area, and Itai Kathein, a business partner living in Florida. Three billing companies located in Texas, California and Florida that allegedly served as intermediaries between Snackable and major phone carriers are also named in the state's complaint.
On the company's website, Snackable claims to have been founded in 1999 to develop "a market leading network of websites with some of the highest converting offers online, reaching millions of Americans every month." One of these services has been the text-based mobile phone game, Predicto, which customers can play with a subscription of $10 a month. The game asks users to make predictions (such as who will win the Oscar for best actress), and winners are said to be eligible for prizes. Some customers have complained that they never consented to their subscription, which appeared to have begun after interacting with an online ad. In 2010, an incredulous techcrunch.com story said that Yechezkell had built a $170 million business on the low-tech games.
Wisconsin's suit claims that Snackable signed state residents up for various email and voice mail services without their consent. One of the services, Email Discount Network, claimed to provide email updates on rapidly emerging deals. Other businesses said to be under the control of Snackable, including Orbit Telecom, Voicemail Direct USA, Douglas-Lambert Laboratories and Intelicom Messaging, also stand accused of placing unauthorized charges on "thousands" of phone bills in Wisconsin. Charges listed by the complaint total about $8.5 million and occurred between 2003 and 2010. Of that sum, some $2.5 million was reportedly refunded to customers who challenged the charges they spotted on their bills by contacting one of the billing companies Snackable contracted with. The suit claims that because of the high refund-rate, these companies should have known that Snackable's methods were less than upstanding and should, presumably, have refused to work with the outfit.
One customer who complained to state regulators says she entered her name, address and phone number while playing an online quiz but never accepted its "terms," which said she would be billed $14.95 a month for voice mail services. Regardless, she says she received an activation email the next day. Again, she didn't click that she agreed, she claims, but received a charge on her phone bill anyway from Intelicom Messaging. Another customer was listed as a "Mona Lisa" from an address in Milwaukee on the "letter of authorization" provided to state authorities by the Snackable company Enhanced Billing Services. This was not the name and address of the woman who had complained of an unauthorized $15.78 charge on her phone bill. The document also listed her birth date and email address incorrectly, according to the complaint.
At crunchbase.com, Yechezkell, who currently lives in New Jersey, is listed as Snackable's co-founder and CEO, and Itai Kathein's profile identifies him as the company's president and fellow co-founder. From both, the attorney general is seeking restitution for customers and potentially fines for violating state law. Read the full complaint here.