FTC Charges Online Marketers With $450M Card Scam

Finally, the FTC has layed charges on the Acai Berr, Teeth Whiteners, Health Supplement scammers.

This is not what I do but they are in a related industry. This is how these usually end.  The regulatory organization that is responsible for administration of a certain area, always eventually lays charges and the whole thing winds down.

Check out this article:

By Darren Waggoner

The Federal Trade Commission has brought a legal action against an online operation that allegedly scammed more than $450 million from consumers in five countries.

Jesse Willms and several companies he controls obtained consumers’ credit or debit card account numbers by enticing them with bogus “free” or “risk-free” trial offers that supposedly required only small shipping and handling fees – and also promised “bonus” offers just for signing up, according to the FTC’s complaint.

The FTC charges Willms and his companies used deceptive tactics in offering various products online – including acai berry weight-loss pills, teeth whiteners and health supplements containing resveratrol (the supposedly healthful ingredient in red wine) – as well as for a work-at-home scheme, access to government grants and free credit reports. The FTC seeks to stop the operation’s practices and make the defendants repay fraud, injured consumers.

Consumers lured into the scam were located in the U.S., Canada, the United Kingdom, Australia and New Zealand.

The defendants allegedly contracted with affiliate marketers whose banner ads, pop-ups, sponsored search terms and unsolicited e-mail led consumers to the defendants’ Web sites, and the defendants paid the affiliates for each consumer whose credit or debit card was charged.

The defendants allegedly made false claims about the total cost of products, recurring charges and the availability of refunds. They also buried important terms and conditions in fine print, the FTC alleged.

The defendants named in the complaint are Willms, Peter Graver, Adam Sechrist, Brett Callister, Carey L. Milne, 1021018 Alberta Ltd., also doing business as Just Think Media, Credit Report America, eDirect Software, WuLongsource, Wuyi Source, 1016363 Alberta Ltd. – also doing business as eDirect Software, 1524948 Alberta Ltd. – also doing business as Terra Marketing Group, SwipeBids.com, SwipeAuctions.com, Circle Media Bids Limited – also doing business as SwipeBids.com, SwipeAuctions.com, and Selloffauctions.com, Coastwest Holdings Ltd., Farend Services Ltd., JDW Media LLC, Net Soft Media LLC – also doing business as SwipeBids.com, Sphere Media LLC – also doing business as SwipeBids.com and SwipeAuctions.com, and True Net LLC – also doing business as Selloffauctions.com.

Willms could not be immediately reached for contact.

Consumers had no reason to believe they would be charged for the trial product or the extra bonus products, but they were often charged for the trial plus a monthly recurring fee, typically $79.95. Consumers also were charged monthly recurring fees for the so-called bonus offers.

Although the defendants offered a money-back guarantee, consumers were often unsuccessful in canceling the charges or obtaining refunds, and the process involved time-consuming phone calls and other steps that made the deals far from risk-free, the FTC complaint alleged.

“The defendants used the lure of a free offer to open an illegal pipeline to consumers’ credit card and bank accounts,” says David C. Vladeck, director of the FTC’s Bureau of Consumer Protection. ” ‘Free’ must really mean ‘free’ no matter where the offer is made.”

The FTC worked with Canadian law enforcement, including the Alberta Partnership Against Cross Border Fraud, in investigating this international scheme. Most of the defendants are located in Alberta.

“Internet fraud is a global problem that requires an international enforcement response,” says Lisa Campbell, deputy commissioner of Competition for the Competition Bureau of Canada. “International cooperation ensures that fraudsters can’t hide behind borders.”

The FTC further alleged that the defendants provided merchant banks with false or misleading information, in order to acquire and maintain credit and debit card processing services from the banks in the face of mounting chargeback rates and consumer complaints.

Willms and his companies also allegedly violated the Electronic Fund Transfer Act and Regulation E (issued by the Federal Reserve System’s Board of Governors) by debiting consumers’ bank accounts without their signed written consent and without providing consumers with a copy of the written authorization.

facebook is down? Check this website to file a report.

I came across this neat website called Facebook Is Down. You can see uptime reports from the past year, see Twitter and Blog posts about facebook being down, report your downtime and see other reports from users like you. It’s pretty neat. Check it out: http://facebookisdown.org

1 Trick of a Tiny Belly | 1 Tip of A Flat Belly Ads | Acai Berry Weight Loss Scams

OK, I thought it was only right to point out the fraud that is being perpetrated on people throughout the world and explain how it works.

You have probably seen some of the ads that are plastered all over hundreds of websites with the animation of a woman shrinking from being large and rather unattractive to thin and happy looking.  They have text in a handwritten font claiming that it is some sort of home remedy or mother’s secret passed down over time.

The human weakness the scam preys on: people hate being overweight, it is socially stigmatized and socially unacceptable and so they are desperate to get thin because they believe that will lead to a happier and success filled life. To some extent they are probably right but that does not mean they should listen to false promises from people trying to sell them crap to make that happen.

How It Works And Why It Is A Scam:

1. People browse websites and see the ads.
2. They click the ads and are taken to a website with a long narrative about the secret
3. After reading the nonsense pitch for a while they are channeled into “trying out” some Acai Berry/Weight Loss Elixir type products.
4. They put their credit card information and click “I agree” to a “no obligation trial”.
5. What they are agreeing to is an endless subscription to be shipped bottles of this stuff each month at a cost of around $80/month.
6. If they do nothing the products keep coming and they keep getting billed each month for $80.
7. When the consumer finally catches on and tries to cancel, the company makes it very difficult to unsubscribe from the service – messing you around on the phone and draining half an hour of your time just to speak to someone.

In Summary
You get endless shipments of useless drinks that are extremely expensive and will never help you toward your goal of losing weight. To stop the orders from coming is a very frustrating and time consuming process and in some cases may not be possible at all.

Read the rest of this entry »

Differentiation – The 7 Principles of Online Marketing Part 2

SearchFaction’s advertising programs bring visitors to your website, and compelling differentiation converts them into clients and customers. Differentiators are what you combine to create the unique selling propositions or value proposition that distinguish your offerings from those of the competition. Read the rest of this entry »

Focus – The 7 Principles of Online Marketing Part 1

At SearchFaction, one of our core goals is to improve how quality businesses are represented on the web and further to that goal we publish and distribute educational information about online marketing. We know that our competitors will see this information and then incorporate it into their service offerings too but that is OK with us because we know this will indirectly help improve everyone’s online experience in Bermuda. Today in part one of a seven part series explaining the seven fundamental principles of online marketing we discuss FOCUS. Read the rest of this entry »

Essential Tips for Selling Anything Online

These tips are designed for software but apply to selling anything online:

Many software startups have gotten religion when it comes to creating “usable” software. This is for good reason. If your software is usable, people will use it, tell their friends, family and hair stylist about it and you end up making more money. Life is good. If it’s not usable, it makes people want to hit their computer or hurt small animals. No referral sales. Life is bad. Read the rest of this entry »

Display advertising is incredibly inefficient

I think the biggest problem is how online display ads are sold.  The current setup exists because of the history of how it evolved and the lack of speed with which these organizations have been able to adapt.  The publishers continue to sell their inventory on websites through the same inefficient chain of phone calls between account managers and clients just as they did 50 years ago, when they were selling print media and that process actually made sense.   On the reciprocating end the agencies are buying the media for clients, using all of the same tedious insertion orders and other old fashioned procedures that they always have.  The agencies keep hiring media buyers and the publishers keep hiring online sales people and the process goes on. Read the rest of this entry »

Ten Year Veteran Search Engine Optimizer Matt Earle Launches New Marketing Firm

Ten year veteran search engine optimizer, Matt Earle has founded a new company called SearchFaction. The new company will deploy the knowledge Mr. Earle has gained over the past ten years while at Just4Clicks, Kanetix Ltd, henderson bas and Lines Overseas Management.

“In the past couple of years I have seen a lot of uninformed opinions spreading about online marketing and search engine optimization. People read something on a blog or forum and assume that it is a fact, when at the basis of it all is just someone’s un-researched guess,” says Matt Earle, Search Marketing Expert at SearchFaction.com. “I believe internet marketing needs to be a scientific process because it exists within a dynamic but logical system. To consistently deliver results one must constantly experiment, record observations, form conclusions and adapt. Also, what may have been true six months ago, may not be true today so you cannot rely on someone who only reads the opinions of others. With the extensive hands on ‘in the trenches’ online marketing experience I’ve had over the past 10 years, generating million of dollars in business for my clients, I understand the formula for success in search and can really deliver results.”

Matt began his career in the late 90’s performing search marketing services in AltaVista for some of the first profitable internet industries. He went on to apply this knowledge at http://MiningNerds.com, a major mining investment portal, and achieved top rankings in Google for many of the top mining related keywords such as “mining stocks” and “gold mining companies”. Also, at http://BusinessCashAdvance.ca, where he achieved top ranks in Google.ca for “merchant cash advance” and “business cash advance”. Since then Matt has worked as a search engine marketing specialist for henderson bas, Kanetix Ltd – an insurance quote comparison company, henderson bas – a well known Toronto interactive agency, LOM, a Bermuda based offshore investment bank and at a company he co-founded to focus on the Bermuda financial services market, Bermuda Internet Marketing.

Matt’s new company, SearchFaction plans to target medium to large businesses who want to get results in competitive niches without incurring massive costs or having to sign long term commitments, like they might have to with a traditional agency. Their consulting packages are designed to suit a wide range of clients and deliver maximum results with a minimum amount of effort.