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.

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.

Why Consuming Drinks Will Not Make You Thin

The only way to get thinner is to burn more calories (through exercise + activity + the base amount your body burns just by living) than you consume in food and drinks (that includes anything you put in your body that has calories including stuff like juice and soft drinks – almost anything that tastes good has calories).  Burn more than you eat – THAT IS THE ONLY WAY!!

Here is an example of an appropriate calorie intake vs. burn ratio that will lead to weight loss for most people:

INTAKE SIDE: It amounts to about three very moderate meals a day: bowl of cereal with glass of orange juice for breakfast, homemade tuna sandwich and an apple for lunch, chicken breast + small scoop of rice + steamed broccoli + one glass of wine for dinner, no snacks after dinner and no dessert).   Which special drinks you consume will not lower the intake side of this equation and will never work to make you thinner – in fact will actually add calories.  I promise you.

If you cheat and have a really high calorie meal, you have to take those calories out of the other meals you have that day.  You are better off just not cheating.

CALORIE BURNING SIDE: Walking when you can in your work life (take the stairs, park far from work etc).  Doing 35 minutes of fat burning (heart rate around 150 depending on age) exercise like running, cycling, stairmaster, swimming etc. 3-4 times per week.

If you do the above, you will get thin and stay thin, live longer and probably be happier.  That is the only way!

But Oprah Endorses Them…
This is a complete and total lie.  Celebrities may have stated casually that these products “maybe cannot hurt” or could have some benefits but they are absolutely not saying “if you drink this stuff, you will get thin even if you sit around and eat McDonald’s all day”.

External Links

• FTC Charges Online Marketers With $450M Card Scam
• CNN – Group challenges acai berry weight-loss claims

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.

I will discuss differentiators in order of their effectiveness. The most compelling differentiator is to be the only or exclusive source for a valuable commodity or solution. We have all seen this happen many times. Next come the superlative differentiators like Best, Biggest, Highest, Most Popular or Number One. Finally there are comparative differentiators like Better, Faster, Higher or Lower. Price-based differentiation is the least compelling, the least profitable and the most difficult to maintain.

Exclusive Differentiators

No differentiator is more compelling than being the sole source for a unique product or proposition. If it is truly one-of-a-kind and yours is the only place to get it, you should be well on your way to success! This is called a monopoly and everyone knows that is good for business.

Exclusive differentiators often include one or more of the following terms: different, exceptional, exclusive, extraordinary, standout, unequalled, unique, unmatched, unparalleled, unprecedented, unrivaledincomparable, lone, matchless, novel, one and only, peerless, single, singly, singular, solely, solitary and solo.

Examples:

• BELCO is the only company in Bermuda from which you can buy electricity.
• Invisible Fence (Bermuda) Ltd is the only provider of invisible fences for your dog.
• Air Canada is the only direct flight between Bermuda and Toronto.

It is obvious why these companies have a good thing going, people need their product and they are the only ones who offer it here.

Superlative Differentiators

If you can’t corner the market, being first in order, best in quality, or highest in degree means you can still dominate it. Everybody likes a winner, so don’t be afraid to trumpet your Number One awards and Most Popular ratings!

Superlative differentiators often include one or more of the following terms: ace, best, biggest, champion, chief, choicest, consummate, extreme, finest, first-rate, foremost, greatest, highest, largest, leading, most, number one, optimum, paramount, pre-eminent, prime, primo, standout, super, superb, superlative, supreme, top, unsurpassed, winner.

Examples:

• Dorothy’s has the best hamburgers in Bermuda.
• SearchFaction is unsurpassed in its ability to market your company online.
• Jamiaca Grill has the best Jamaican food in Bermuda.

You can see that this is not quite as good as a monopoly but these company have differentiated themselves as superior and are now the go to place for these products or services.

Comparative Differentiators

If you aren’t the best, you can still be better than the rest. Your proposition may not be unrivaled and the competition may be considerable, but you can still succeed if your offering is perceived as relatively desirable and preferable to others.

Comparative differentiators often include one or more of the following terms: better, bigger, choice, desirable, finer, fitter, fitting, greater, higher, improved, larger, more, preferable, preferred, quality, select, suitable, surpassing, useful, valuable, worthier.

Examples:

• Supermart has a better selection of meats and cheeses than other grocery stores.
• HWP offers better customer service than the many other garages in Bermuda.
• Marketplace has better produce than other stores in Bermuda..

The more focused your website is, the more effective it will be. Highly successful websites project a clear and unmistakable message that is:

• Tailored … to a specific audience,
• Concentrated … on a specific proposition, and
• Targeted … for a specific action.

If you try to be everything to everybody, you end up being nothing to nobody.

Although the mission of most advertisers is to convince clients and customers otherwise, the reality is that there are very few products needed by everyone, and few if any propositions that appeal to everybody. Sure, everybody in Bermuda who drives needs gas (e.g. Shell), a car (e.g. Bermuda Motors), licensing (e.g. eTCD), and maybe a mechanic (e.g. HWP). And maybe, just maybe, everybody who drives needs your ingenious new car cleaning product. But you won’t sell many by trying to be all things to all people.

Why? Because everybody doesn’t buy things. Somebody buys things, and that individual has distinct tastes and preferences. If you want to sell your car cleaning product to somebody, and perhaps many others like them, you need to

• identify the demographics of the market segment most likely to be interested in what you have to offer, and
• tailor your message to that audience.

Concentrated … on a Specific Proposition

If everything is flagged as important, nothing will be seen as important.

For most business websites, the typical first-time visitor is somebody who referenced a search engine seeking information on a specific topic to fill a specific need, clicked a ranked listing for the site, and landed on their web pages. It follows that the first thing they expect to see is a specific answer to their query, solution to their problem, or product that fits their requirements. And Bermudians being busy hard-working people, if what they seek is not presented in a clear and quickly comprehensible format, they are probably going to click their Back button and go to the next listing.

You, your organization or your enterprise may offer many things to many people, but don’t try to offer them all on one web page! Instead, assign a specific objective to each page on your site, and then design every major element of the presentation to contribute to the achievement of that objective. Links to related pages are expected, and links to complementary sites are fine. But stay on point, emphasize what’s important, and only what’s important.

Targeted … for a Specific Action

If they have to guess, you don’t pass the test.

On highly successful websites, every web page must have a purpose. That purpose may be as broad as conveying information, or as narrow as convincing a customer to purchase a specific raincoat with a special type of wind proof hood. And if that purpose includes a call-to-action, it should be clear, concise, easy to execute, and visually reinforced.

Order now… Add to cart… Complete this survey… Take this test… Use this form… Call for a free consultation… Come see us… Go here next… Never waste their time. Never leave them hanging. Never get them frustrated. And never leave them guessing about what you want them to do.

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.

So, create usable software. That’s an obviously right thing to do.

But, in addition to worrying about the usability of your product, you should spend some amount of time thinking about its buyability. Buyability is exactly what you think it means (I’m a simple-minded guy). It measures the degree to which you’ve made it easy for customers to give you money in exchange for your product.

Most of the things that make software buyable are blindingly obvious. But, regular readers of this blog know that obviousness is not a deterrent for my writing – I have an uncanny knack for the obvious.

So, here goes:

Things That Increase The Buyability Of Your Software

1. Transparent Pricing: I’ve talked about this one before, but it is critical that you provide clear pricing about your product right on your website – somewhere prominent. Maybe even a page called “Pricing” that has a link from the home page. The reason for this is really, really simple. If a customer has to call you just to find out what your product costs, then they can’t buy it right now, can they? So, without clear pricing, you can’t sell easily. There are probably some good reasons why certain companies don’t want to put pricing on their website (for example, the solution is custom, the price tag is embarrassingly high, etc.). In this case, your software is likely not very buyable, and this article is probably not for you.

2. Immediacy: Face it, we live in a “now” world. Even if you’re selling astronomical software for star-gazers in Australia and its high noon in Australia and there’s no possible way the user can use the software immediately – your customer still wants it NOW. If a potential customer signs on, they expect to be able to purchase the software and use it. Now. If you provide a trial version, then the trial should work immediately. If they pay for the software, they want to use it immediately. Nobody wants to see a: “Thank you for your order. We will process it as soon as possible and send you your unlock code.” If you take an order, then fulfill the order. Period. If the software can somehow “call the mothership” and activate itself, even better. Otherwise, the unlock code (or registration code, or activation code, or whatever the cool kids are calling it these days) should be BOTH shown on the order confirmation page and emailed to the customer. The issue with just emailing it is that about 14.2% of the time the customer doesn’t get the code. The problem could be your mail server. Could be a spam filter. There are few things more frustrating than having just paid you for your software and then waiting for the “magical” email that will unlock the immeasurable happiness and joy that your software will bring to my life. I don’t want to wait.

3. Minimal Steps: You need to figure out what the chances are that the customer that’s about to place an order has a high likelihood of purchasing something from you again. If the chances are low (possibly because you have a single product), then don’t make them “register” for your site. Don’t make them add an item to a shopping cart and then “check out”. There should be two steps to purchase: User clicks on the “Buy Now” button (even better, call it “Use Now” or “Enjoy Now”). Form shows up with credit card info, user enters stuff clicks a button and magic happens (money trades hands). Congratulations, your visitor is now a customer. Once that is done, feel free to provide a link asking the customer if they want to register so they can receive information about updates, participate in your support forums, etc.

4. Payment Methods: In most cases, you’re probably going to use credit card processing for your orders. If it makes sense for your customers, and you also want to provide the PayPal option, that’s great too. Also, it may suck that Amex charges higher fees than other cards. Get over it. Some customers want to use Amex for no other reason that they like their rewards program. You should be making enough margin on your software that you’d still rather have an Amex sale than no sale at all. So, get over the higher fees. Besides, many companies exclusively use Amex for their corporate cards, and it’s not likely you want to miss these sales.

Google image ads has changed all of this.  Their system makes it incredibly easy to buy exactly the slice of targeting and share of voice you want.  If only Yahoo, the NYT, the Washington Post and all of the other old media companies (yes I count Yahoo in that) would sell their traffic on Google Image Ads or build a similar system, life as an advertiser would be a lot easier.  The experience for the consumer would be drastically improved and I would be a happy man.

For now, we can only hope someone takes Yahoo and does a leveraged buyout and irons out all of their inefficiencies.  Their management sure as heck doesn’t seem up to the job.

“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.