Home > News > U.S. Probes IBill, 2 Other Billing Processors • Bookmark   • Newsletters   • Register Search Options


U.S. Probes IBill, 2 Other Billing Processors

U.S. Probes IBill, 2 Other Billing Processors
Get XBIZ News
May 6, 2004 4:43 PM PDT    Text size: 
DEERFIELD BEACH, Fla. – The Justice Department is investigating iBill, one of the largest online adult billing processors, according to a filing Thursday with the Securities and Exchange Commission.

The investigation is apparently looking at possible antitrust violations and seeks to determine whether two competing online adult payment providers, as well as iBill, collaborated to set fees and if so, whether practices are anti-competitive.

The names of the competing payment providers were not disclosed.

Deerfield Beach, Fla.-based IBill, formerly known as Internet Billing Co., was recently acquired by Penthouse International Inc. in March from InterCept Inc. through its Media Billing LLC division. The company said it learned of the investigation after closing the deal.

Penthouse said iBill must provide Justice with data regarding certain one-time fees charged to merchants in 2003. The company, in the SEC 8-K filing, said it is cooperating with the inquiry.

Penthouse said in the filing it received a letter from attorneys of a former iBill client last month demanding to be reimbursed for “certain third-party costs, including Mastercard fines.” The letter, Penthouse said, sets forth an intention of a class action suit unless payment is made.

Penthouse believes potential damage claims relating to iBill could exceed the tens of millions of dollars.

Penthouse said it will withhold payments to InterCept until the probe is resolved or until InterCept posts "adequate" collateral to secure protective obligations to the company.

Also in the filing, the company revealed that InterCept is also seeking $3.8 million in cash from the largest shareholder of Penthouse International as part of its sale in April of iBill.

InterCept claims that Media Billing has defaulted on a $793,749 note issued in connection with the purchase of iBill.

Media Billing issued the note March 22 as part of its $10.25 million purchase of iBill platform, according to the filing, along with $750,000 in cash paid to InterCept and a further $2,804,000 in cash paid to First Data Merchant Services, a business partner of iBill.

The filing also indicated that InterCept claims Media Billing failed to cause First Data to release a $3 million letter of credit backing the iBill purchase, and that Media Billing owes Intercept around $3.8 million in cash under the terms of their March 16 purchase agreement.

Calls to the companies after business hours made by XBiz were not returned.

More ways to get XBIZ News:  RSS Feeds  |  E-Newsletters  |  Desktop Widget  |  Mobile
Looking for porn star news and behind-the-scene videos? Check out XFANZ.com !


Paysite Meetup: Catching Lightning in a Bottle

We just completed the first XBIZ.net Paysite Meetup in Prague. We caught lightning in a bottle. I first heard that expression from a friend who works in TV. He started in TV in the 1960s selling advertising,... More »

Why a Traffic Network Killed a Popular Offering

Change begets change. Nothing propagates so fast. If a man habituated to a narrow circle of cares and pleasures, out of which he seldom travels, step beyond it, though for never so brief a space, his departure... More »

Luring Cam Users With the Right Ad Format

The live cam marketplace is highly competitive filled with big-, medium- and small-sized players. So how do you stand out from the crowd to attract new users or persuade users to come back and spend their... More »
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.

Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Subscribe to XBIZ Premiere magazine, the industry's leading adult retail trade publications, delivering the most timely and comprehensive business news and information to producers and retailers of adult products.


Latin America Adult Business Expo

Jul 10 - Jul 12
Cartagena, Colombia

XBIZ.net Paysite Meetup

Jul 13 - Jul 13
Barcelona, Spain

ANME Founders Show

Jul 16 - Jul 18
Los Angeles Marriott Burbank Airport


Aug 03 - Aug 06
Montreal, Quebec
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!