Failure to deliver payments on time
Complaint
Alex Campbell
Country: United States
We gave this company aurthority to proceed in retreiving our debt of over $50,000.00, at 30% commission. Now the agreement calls for us to receive our money 30 days after they have received money from our former customer.
It is over 90 days and we have only received 1 payment, which was nearly 40 days late. Now we are still waiting on the second payment and even that will be late.
Is there anything we can do that would make these people keep their word and make the payments as promised, or is this a Federal Law infraction and should we go to the Feds ( FBI ).
It is over 90 days and we have only received 1 payment, which was nearly 40 days late. Now we are still waiting on the second payment and even that will be late.
Is there anything we can do that would make these people keep their word and make the payments as promised, or is this a Federal Law infraction and should we go to the Feds ( FBI ).
Comments
http://www.bbb.org/houston/business-reviews/d ... on-tx-90012000/
"...
Business Contact & Profile
Business Name: Premiere Whitening
CR* Teethwhite
Dazzle White
E-V* Teethwhitner
Everbright Smiles
Farend Services Limited
Fyso Distribution Center
immaculatewhite.com
Koprcyn Teeth Whitener
Naturale Source
Pre White
Business Address: P.O.Box 90745
Houston, TX 77290
...
Phone Number:
(888) 694-9257
(866) 284-3491
(866) 528-6214
(877) 219-3549
(877) 233-1804
(877) 240-1163
(877) 241-2495
(877) 259-2065
(877) 365-0233
(877) 396-6544
(888) 284-3491
(888) 561-6332
(888) 674-9257
(888) 964-9257
BBB Accreditation: This business is not a BBB Accredited Business
...
http://www.premierewhitening.com www.everbrightsmiles.com www.everbrightsmiles.org foryoursmilesonly.com
...
6300 WILLARDVILLE ROAD Houston , TX 77048
...
PO Box 90944 Houston , TX 77290
...
15621 Blue Ash Dr # 160 Houston , TX 77090
...
15621 Blue Ash Drive, Apartment 160 Houston , TX 77090
..."
Google a sampling of the above names, and you will find numerous complaints of charge cramming. Complaints include charges before the "free trial" even arrives, problems cancelling, charges that continue after cancelling, charges for product never even received, etc.
For example:
http://getsatisfaction.com/chicago_tribune/topics/dazzle_white_scam
Note complaints that it is nearly impossible to actually reach them to cancel, rendering their "free trial offer" deceptive.
http://www.complaintsboard.com/complaints/my-ever-brite-smile-c303330.html
http://www.complaintsboard.com/?search=IMMACULATEWHITE&sort=date
Charge cramming complaints from British "free trial" customers. Complaints report losses in the hundreds of dollars.
http://www.complaintsboard.com/complaints/premier-whitening-c285994.html
It appears that bogus "debts" from this company are resulting from disputes of fraudulently crammed charges. Customers trying to cancel are met with hours long waits on hold, with the cancellations ignored in many cases anyway. That renders the "free trial" offers with negative-option automatic "free-to-pay" conversion deceptively advertised, making such crammed charges unauthorized and therefore fraudulent.
VISA recently cut off over 100 "acai berry" charge scammers due to a flood of similar complaints. File fraud disputes through your bank immediately, and close and block the account due to fraud. Follow up with a written dispute or fraud affidavit sent to your bank's dispute address from your statement, mailed certified for proof of timely notice within the 60 day dispute period, as required by FRB Reg. E or FCBA.
You should also file a fraud complaint with your local police, and obtain a copy of the police report, as they appear to not only block cancellations, but sell off reversed disputed charges as "debts" to debt collectors. The police report can be useful in getting negative credit report information resulting from fraudulent charge cramming removed.
File complaints against charge crammers and accomplice debt collectors with FTC, your state Attorney General, the Texas Attorney General, the state Attorney General of any debt collector that contacts you, and at www.ic3.gov to report internet related fraud.
The Texas Attorney General has been active against other charge crammers in that state. One example was Momentum Direct:
https://complaintwire.org/Complaint.aspx/tTraG_dd4QAzQwjJnp0WIg/6
If contacted by a debt collector trying to collect on fraudulently crammed charges reversed through a bank dispute, send a letter to the debt collector, in accordance with FDCPA, disputing the charges as fraudulent, mail it certified, then contact the office of Attorney General in that state due to the fraudulent origin of the original charges.
The New York AG has been very active against both illegal debt collection practices as well as fraudulent charge cramming, most recently in connection with "discount club" crammers.
You can also file a mail fraud complaint with the U.S. Postal Inspector, for using the U.S. Mail in a fraudulent invoicing scheme.
http://www.bbb.org/us/article/teeth-whitening ... ers-faces-12759
Health and beauty products including tooth whitening sales with "free trials" followed by fraudulent cramming, made #6 on the Ohio Attorney General's list of Top Ten scams for 2009.
http://www.ohioattorneygeneral.gov/SpeakOutOh ... n-scams-of-2009
FTC consumer complaint, ca. Sep-2009. Note that the crammed charges start before delivery of the "free trial". Also note that the credit card had to be cancelled to stop the charges. Typical of consumer complaints with this type of scam.
http://www.ftc.gov/os/comments/negoprulereopen/543809-00005.htm
Various tactics used to block cancellation. Note deceptive use of the "free trial" offer, to make sure it isn't really free. Deceptive e-mail failed to disclose cancellation terms or "membership" charges. Deceptive e-mail calling it a "free gift". Charges start before "free trial" arrives, or it may never arrive. Charges continue after cancelling. Note their claim that to cancel and stop the charges, the "free trial" must be returned.
http://www.complaintsboard.com/complaints/premiere-whiteningakafysopro-c266820.html
Be care who you blindly give advice to
Companies engaged in such practices typically put their terms somewhere, yet they also build up long histories of complaints from consumers, often leading to FTC or state Attorney General lawsuits. When numerous consumer complaints indicate that consumers were not aware they would automatically be enrolled in automatic shipment plans, do we conclude only that somehow hundreds or thousands of people can't read? If the complaints continue for months or years, yet the company fails to responsibly "clarify" the disclosure of their terms, is this a "reading problem"? Or is this intentionally deceptive marketing, deliberately designed to do what it apparently is doing?
If large numbers of people are in fact not getting what they thought they had agreed to, based on the manner of the marketing representations, then that marketing is, by definition, deceptive.
Charge cramming scams don't even rely only on deceptive disclosure. Such diclosures never claim that the consumer is agreeing to have money taken from his account for the rest of his life, with no cancellation possible, since that would be practically an admission of fraud and deception, yet such companies often act as if this was the case anyway. They just don't say that's what they are doing. Instead, they employ various tactics to block attempts at cancelling, even when the consumer realizes charges are being made that they were not aware they had "authorized", and even when they attempt to cancel under the terms of the "free trial" offer.
Commonly reported cancellation blocking tactics, as reported in a number of FTC and state Attorney General complaints, include shipping the "free trial" so that it arrives after the "cancellation period" so that there is no way to actually cancel before being charged for the full price product, requiring that cancellation be done via a phone number that is routinely not answered, accepting a cancellation by phone and then ignoring or "losing" it, failing to disclose the negative option automatic shipment terms except in some flyer slipped into the package, which arrives too late, requiring that the unwanted package must be returned for a refund, but claiming it was never received, or arrived "damaged", requiring that unused "free trial" product be returned to cancel, requiring that cancellation or refunds be requested by a form, which must be first sent, which is delayed or never arrives, etc. All of the above are in effect undisclosed "terms", only disclosed when the consumer tries to cancel. The product may not even be arriving, even though it is being periodically charged for, which also makes it rather hard to return. All of these have been used by a number of companies engaged in this type of scam.
The above tactics often leave consumers with no alternative but to block charges that are unauthorized or "uncancellable" by disputing them through their bank or credit card company, as they are permitted to do under federal law, regardless of what "terms" may have been disclosed.
With most of these cases, that is where it ends. Consumers finally learn that the only way to stop the charges is to dispute them through their bank, close or block the accounts, and follow up by filing FTC or Attorney General complaints. BBB has been pretty effective in tracking and reporting on this type of fraud as well, and both "teeth whiteners" and "acai berry" cramming scams have made their "top ten" lists in recent years.
VISA recently recognized the level of this type of cramming fraud, blocking access to their network from a bunch of "acai berry" operations, over a hundred. If the complaint levels get really bad, FTC or some state AG will move against companies, under the FTC Act, or state consumer protection laws. See, for example, the Texas AG action against Momentum Direct, or FTC actions against a diet pill charge crammer.
Note that the above patterns of activity have nothing to do with credit card theft. They generally result in many similar complaints of fraudulent charges over an extended period of time, combined with tactics aimed at evading cancellations. They may also include tactics aimed at minimizing regulatory action, such as operating under many different names, contact numbers, and websites, to reduce complaint levels associated with any name, or operating cross-border, from out of the country, often Canada.
You would think that a debt collector that values its reputation would turn down such fraudulent "accounts", and in fact in most cases once the credit card or checking account is blocked, that is usually the end of it.
Recently, however, several debt collectors have been mentioned repeatedly in complaints in connection with such cramming operations.
They appear to ride a fine line between how much pressure they use to collect, and at what point they drop the "account" to avoid risk of interest in the combined operation from FTC or an Attorney General.
(A similar pattern shows up in consumer and insider reports on magazine subscription scams, for example, which have been around longer and are therefore easier to find information on.)
What becomes clear from the profile of complaints is that debt collectors choosing to collect on fraudulent accounts know exactly how tainted their "accounts" are, but have adjusted their tactics to accommodate the unique requirements for collecting on such accounts. Tactics mirror fraudulent telemarketing structures, including deception through omission, plausible deniability, use of closers or case handlers, compartmentalization to limit knowledge among employees, etc.
Your "advice" labels you as an insider, as you claim. Yet you practically admit you are aware that these busineses are "shady" and that debt collectors working for them know that. Instead, your advice is directed to just pay them off, to save FICO points, and stress, and supposedly get a settlement in writing, as if this is just some "business settlement".
The problem with your "advice" is that this was a "con" from the start, and it continues to be a "con" even when the "debt" is in the hands of the debt collector.
The "debt" often originated from blocking of fraudulent cramming in the first place, yet the crammer didn't just move on, but took the next predatory step of using a willing debt collector, attempting to launder the "taint" of the bogus "debt". The debt collector knowingly chose to be a part of this scheme. Given this behavior, there is no reason to expect that payment of one fraudulent "debt" won't be followed by further demands for payment of additional "debts". That is basically what cramming is anyway. In fact, this "reloading" is common practice in "magazine subscription" fraud.
From the start, this was a game of "chicken", or brinksmanship. You stop it with MAD. ALWAYS report fraud, to FTC, to your state AG, to the debt collector's AG, to U.S. Postal Inspector. If the debt collector is as smart and clever as he thinks he is, and he intends to be in business for the long term, he knows when to fold. Let the numbers tell the story.
http://www.bbb.org/us/article/teeth-whitening ... ers-faces-12759
"...
The countless Web sites for various teeth whitening products claim to offer a no-risk, money back guarantee, free trial of the product. To sign up, customers must provide a credit or debit card number to cover shipping. Complainants to BBB state that they are billed before their trial ends and continue to be billed after they have told the company they want to cancel. Complainants also may find mystery charges for other companies and services that they didn’t realize they were signing up for with their “free” trial.
..."
Recent Clark Howard story. Consumer reporter for a Florida newspaper got stung.
http://clarkhoward.com/liveweb/shownotes/2010/05/24/18469/?_form=1
Wired article on deceptive marketing of teeth whitening products.
http://www.wired.com/epicenter/2009/10/whiter ... sing-practices/
"...
In a little-noticed action last month, Utah’s consumer-protection division cited Farend (.pdf) for trapping customers with fine print on a network of fake blogs that signs them up for an expensive subscription to the tooth-whitening products rather than the low-cost or free single unit they think they’re ordering.
“After realizing I was scammed, I tried four times to cancel, two times through live chat … and two times by phone, a free trial offer to Dazzle Smile and was told that the auto-ship subscription was canceled; however the free trial subscription could not be canceled [and] to my surprise, I also found out that they auto-enrolled me in another service, World Club Fitness,” reads a complaint to the Oklahoma attorney general, one of thousands related to online tooth-whitener scams reported recently to law enforcement and consumer-rights agencies.
Attempts to reach the company for comment were unsuccessful.
The citation is the first indication of a backlash against tooth whiteners and the companies that market them, fueled by the intensity of recent online ad campaigns touting several competing products.
In a sign of widening interest, the Better Business Bureau this month joined the fray, opening an investigation into multiple tooth-whitening brands, including Dazzle Smile.
“The use of negative marketing options [that offer] a free trial and then you get billed every month over and over again, is being used to sell so many products online right now, and it’s just a scourge of the internet,” said Alison Southwick, spokeswoman for the Better Business Bureau. “People are getting ripped off across the country for any number of products [including these tooth-whitening products] when they think they are getting a free trial.”
..."
Recent Wired article on a lawsuit in the "teeth whitening" industry that may be resulting in new attention to deceptive negative-option marketing.
http://www.wired.com/epicenter/2009/11/teeth- ... soft-and-yahoo/
"...
Rules giving safe harbor to search sites don’t mean that the feds can’t cut through that immunity to strike directly at fraud. The Federal Trade Commission has investigated scores of misleading offers, especially in the second half of 2009. And according to a government sunshine request filed by Wired.com, the FTC received complaints against Dazzlewhite, Dazzle Smile, Dazzle Smile Pro and Farend Services.
As a matter of policy, the FTC does not say whether it is investigating a particular company until an investigation is finished. But it has aggressively pursued other negative option advertisers involved in nicotine patches (Nicocure, Stop Smoking 180, and Zero Nicotine), payday loans (VirtualWorks’s EverPrivate Card and Secret Cash Card), supposed government grants (Grants For You Now, Grant One Day and Easy Access Grant), get-rich-quick schemes (Google Money Tree) and discount pharmacy cards (InterBill’s PharmacyCards.com).
That history suggests that Dazzlesmile and its alleged copycats have more to worry about than just trademark infringement.
..."
Utah Division of Consumer Protection notice to Farend Services Ltd d/b/a Dazzle Smile regarding 2 counts of alleged violations of the Utah Consumer Sales Practices Act.
http://www.wired.com/images_blogs/epicenter/2 ... ve-citation.pdf
http://www.myfloridalegal.com/lit_ec.nsf/inve ... 525766900688EA7
"The case file cited below relates to a civil -- not a criminal -- investigation. The existence of an investigation does not constitute proof of any violation of law.
Case Number: L09-3-1202
Subject of investigation:
RNR MEDIA LLC, a Florida Limited Liability Company and RAUSCHER BEKKE LLC, a Florida Limited Liability Company a/k/a CLEANWHITES and a/k/a CLEANWHITESPRO and a/k/a ADVANCE CLEANWHITES and a/k/a STAYWHITE and HEALTHCLNS and a/k/a JUN CLEANSE and a/k/a JUN SLEEPWELL and a/k/a VP WEIGHT SECRET and a/k/a VP BEAUTY SECRET and a/k/a VP MIRACLE IMPROVE HEALTH and a/k/a BEVERLY HILLS SMILE and a/k/a DAZZLE 4 ME and a/k/a PREMIUM WHITE and a/k/a SUP*TEETHWHITE and a/k/a SUP*SMILEBRIGHT and a/k/a INTERNATIONAL SERVICE FEE and GREEN BRACKET LLC, a Florida Limited Liability Company a/k/a DERMAPRIL and JESSE STEIN, Individually and PAUL NUTE, Individually,
Subject's address:
407 Lincoln Road Suite 11C
Subject's business:
Direct mail
Allegation or issue being investigated:
Negative Options cases. All three companies offer "Free Trials" or "99 Cent Trails" and a "money back guarantee", consumer pays shipping and handling. Once they have your credit card number the consumer finds a recurring monthly charge (anywhere from $49.99 to $80.00) and usually does not even get the product that they were deceptively signed up for. Cannot get a refund when requested.
AG unit handling case:
Economic Crimes Division in Ft. Lauderdale, Florida
..."
Lawsuit filed. Note that they were not only cramming charges under their own names, but passing on account information so others could cram more charges. The only way for consumers to stop this is through bank fraud disputes and blocking or shutting down accounts, through FRB Reg. E or FCBA.
http://www.myfloridalegal.com/newsrel.nsf/new ... 52576F8006E9F68
"April 1, 2010
Media Contact: Sandi Copes
Phone: (850) 245-0150
Attorney General Sues Miami Company Over Allegations of Fraudulent Advertising
TALLAHASSEE, FL - Attorney General Bill McCollum today announced that his office has sued a Miami-Dade County company and two affiliated companies over allegations the companies and their owners enrolled consumers in a monthly subscription program without the consumers' knowledge or consent. CleanWhites, is affiliated with CleanWhites Pro and Advanced CleanWhites, markets teeth whitening products but allegations of a negative options scam prompted the Attorney General's investigation.
CleanWhites and owners Jesse Stein and Paul Nute advertised a "free trial" of teeth whitening products and allegedly advertised that only the payment of shipping and handling was required. However, an investigation by the Attorney General's Economic Crimes Division revealed that after consumers paid shipping, they were allegedly enrolled in a subscription program that charged their credit cards $49.99 - $125 a month. Consumers also reported that after cancelling the subscription, they were still charged the full price of the product.
Further investigation revealed that the companies also allegedly provided the consumers' credit card information to additional websites selling similar products. Consumers complained they were billed for items never purchased and were regularly solicited for other items in which they had no interest. The Attorney General's Office has received hundreds of complaints about the practices of the companies and their owners, one of which was featured in Business Week and on "20/20" in 2006 as one of "the biggest online spammers."
The Attorney General's lawsuit seeks injunctive relief, full consumer restitution and ultimately a permanent injunction prohibiting all three CleanWhites entities and both owners from engaging in similar business practices in the future. The lawsuit was filed today in Broward County Circuit Court.
..."
Note that their various websites have notices that they are no longer taking orders, while the the peel.com site is no longer active.
Attorney General press release:
http://www.illinoisattorneygeneral.gov/pressroom/2010_02/20100217b.html
Complaint by the Texas Attorney General against a deceptive "health product" "negative-option automatic shipment" cramming scam. Note how the LLC "veil" is "pierced", with the lawsuit and resulting judgement applying to both LLC and owners personally, treating them as one entity.
http://www.oag.state.tx.us/newspubs/releases/ ... mdirect_pop.pdf
Final Judgement and Permanent Injunction against Momentum Direct and its owners.
http://www.oag.state.tx.us/newspubs/releases/2009/021709Signed_AFJPI.pdf
They appear to be headquartered in Alberta, Canada, with various DBAs linked to an address in Cyprus.
Connections to other scams other than "teeth whitening", including "acai berry", "government grants", etc.
http://www.scamtimes.com/product-scams/media- ... -cyprus-shells/
Charge cramming complaints, including reports of cramming under a variety of names other than the original scam consumers may have fallen for.
Purpose appears to be to evade attempts to just block charges under one company name. Only effective consumer response is to shut down the account.
Billing appears to be run through Cyprus.
https://800notes.com/Phone.aspx/1-866-948-5508
Wired article also mentioned Nomilink Management, also based in Cyprus.
http://dazzlesmile.com/press/First%20Amended% ... 003-22-2010.pdf
http://www.pennyauctionwatch.com/2010/05/swipebids-jesse-willms/
http://forums.780tuners.com/showthread.php?t=113941&highlight=jesse+willms
"everbrightsmile" => apex solutions, Las Vegas NV
http://www.complaintsboard.com/complaints/my-ever-brite-smile-c339855.html
http://www.teethwhiteningreviews.com/item.php?id=76
http://www.complaintsboard.com/complaints/sparkle-white-c326831.html
"46 days ago by ltrainsilly -1 Votes
If anyone has sent money to this company, please contact Detective Michael Lawson of the Wilmington Police Department at 302 576-3646, an investigation is being conducted regarding this company. "
Confirmation that above phone number is Wilmington DE Police Department.
http://www.wilmingtonde.gov/departments/police.htm
Additional posting by Det. Lawson looking into an "advance fee loan" scam, "Lowenstein&Mills Capital Group".
https://800notes.com/Phone.aspx/1-877-867-0458/2
"Online Profit House" / "Natural Wellness Resources" cramming attempt after cancelling. Note that they are passing consumer account information between scams. They are mixing up their lines: "return the unused portion within 30 days" on some "internet business" scam?
http://www.ripoffreport.com/work-at-home-business/online-profit-house/online-profit-house-natural-we-e8293.htm
"...
It appeared the signup was free, but when I read the fine print, the chaerges were around $135.00. I cancelled within 48 hours, and got a cancellation confirmation number, and the name of the person I spoke to. Thankfully, I retained this information! Over two months later, I received a letter from a collection department informing me that my debit card had been declined when they attempted to charge men $139.95 because I "failed to contact Internet Profit Library Membership within 14 days to cancel my membership". Seems I also failed to "return the unused portion within 30 days". They threatened to turn my account over to their collection agency, and warned me about a "negative effect on your credit report and score."
..."
Complaints agaisnt Natural Wellness Resources. Collection agency collecting on crammed charges.
http://www.consumeraffairs.com/health/natural_wellness_resources.html
BBB report on Natural Wellness Resources, Wilmington DE, rated "F". This is the collection agency the Wilmington Police are looking for information on.
http://www.bbb.org/delaware/business-reviews/ ... on-de-32001175/
"Natural Wellness Resources
NWR Financial
Business Address: 901 N. Market Street, Suite 1000
Wilmington, DE 19801
Phone Number: (866) 398-2183
(302) 824-5283
Email Address: notifications@nwrpayments.com
BBB Accreditation: This business is not a BBB Accredited Business
Type of Business: COLLECTION AGENCIES
Website Address: http://nwrpayments.com/
..."
If you are dealing with fraudulent collection attempts by Natural Wellness Resources on fraudulent crammed charges, file fraud complaints with FTC, your state Attorney General, Deleware AG, www.ic3.gov, and then contact the Wilmington DE Police Department, 302 576-3646, Det. Michael Lawson.
2) FDCPA violation, illegal threat: "file theft charges".
3) Indications the scheme may involve switching of their multiple websites between obscured notification of "negative option automatic shipment", replaced by more obvious terms during the "debt collection" phase. The consumer would have no evidence unless they took screenshots of webpages that at the time showed nothing suspicious.
The collection agency has been cued on where to look.
Note, in the "penny auction" scheme outlined above (see the pennyauctionwatch links), there were also reported indications of altering terms between "obscured" and "clarified" by the time the "account" was in the hands of the collection agency.
We may be dealing with charge cramming backed up by a "bait and switch" online dynamic "contract" fraud, with collection agency partners.
Pattern of post-closing "term shifting" is similar to schemes employed in "magazine subscription" telemarketing scams, except using webpages instead of fraudulent telemarketing. Even when caught, they could just claim it's a "mistake". Plausible deniability. Very slick.
http://www.complaintsboard.com/complaints/smile-brightdazzle-white-c251377.html
"...
The premier co. sent it to a collection agency who says they are going to file "theft" charges against me. The collection agency suggested I go to the premier web site to re-read the agreement. Either I didn't see the agreement or didn't read it. I would never agree to that contract. Plus the agreement was up-dated Nov. 30 and my order was in Oct.
..."
"...
13. On information and belief, “Epic Advertising” came about as part of a re-branding to downplay and hide that it is in fact “Azoogle,” primarily because Azoogle is widely known as having been the target of multiple investigations and lawsuits regarding SPAM emails and entering into a settlement with the Florida Attorney General regarding alleged ads that offered “free” ringtones but instead tricked consumers into signing up for paid ringtone subscriptions.
...
15. Defendant Jesse Willms is now, and at all times mentioned in the Complaint has been, an individual residing in Canada with his residence at 527, 52328 Range Road 233, Sherwood Park, Alberta, Canada and principal place of business in Alberta, Canada. Jesse Willms, however, conducts significant business on the internet throughout the United States, including in Utah.
16. Defendant Jesse Willms has been the target of multiple investigations and lawsuits regarding unfair competition, false advertising and deceptive business practices, trademark and copyright infringement, product counterfeiting, and trafficking in counterfeited products. Jesse Willms is known to have entered into at least three substantial settlements to resolve those charges.
17. Defendant 1021018 Alberta Ltd. (“1021018”) is a Numbered Alberta Canadian Corporation. Defendant Jesse Willms is a director and 100% shareholder of 1021018 and personally participated in and had the right and ability to supervise, direct and control the wrongful conduct by 1021018, as alleged in this First Amended Verified Complaint and derived direct financial benefit from such conduct.
18. Additionally, 1028018 registered and owns the trade name “Just Think Media” and does business as “Just Think Media.” Willms and 1028018 use “Just Think Media,” (http://justthinkmedia.com) as an internet marketing company that purportedly creates products and then markets those products using internet advertising practices including the use of affiliate advertising, web sites, banner ads, email marketing and contextual advertising. Jesse Willms personally participates in and had the right and ability to supervise, direct and control the wrongful conduct by “Just Think Media” as alleged in this First Amended Verified Complaintand derived direct financial benefit from such conduct.
19. Defendant Farend is a company registered in Cyprus that purports to sell teeth whitening products. Its only shareholder of record is Nomilink Management, Ltd., another company registered in Cyprus. Farend also operates the following post office box in Des Moines, Iowa: Post Office Box 10276, Des Moines, Iowa 50381 and also lists 22100 East 26th Avenue, #100, Aurora, Colorado 80019 as its contact address on at least one of its websites.
20. On information and belief, Defendants Jesse Willms, 1021018 and Just Think Media use Defendant Farend as a dba to be a public front address (although it is located in Cyprus) in order to sell the teeth whitening products and other products purportedly developed by Just Think Media.
21. On information and belief, Defendant Jesse Willms personally participated in and had the right and ability to supervise, direct and control the wrongful conduct by Farend, 1021018, and Just Think Media, as alleged in this First Amended Verified Complaint and derived direct financial benefit from such conduct.
22. Upon information and belief, at all times Defendants Jesse Willms, Farend and 1021018 were the principals, agents, affiliates, partners, co-conspirators or alter-egos of each other, and each acted within the course, scope and authority of such relationships and ignored corporate formalities so that, as a result, Willms, Farend and 1021018 are in fact alter egos of one another and are jointly and severally liable for the acts alleged herein. Hereinafter, Willms, Farend and 1021018 are collectively referred to as the “Willms Defendants.”
23. Defendant AtLast Holdings, Inc. (“AtLast”) is a Colorado corporation with its corporate headquarters and principal place of business located at 22100 East 26th Avenue, #100,
24. Defendant Neverblue Media, Inc. (“Neverblue”) is a Canadian corporation with its headquarters in Victoria, British Columbia, Canada. Neverblue is a wholly owned subsidiary of Vertrue, Inc., which is a wholly owned subsidiary of Velo Holdings, Inc. Similar to Epic, Neverblue is an internet marketing company that utilizes a network of affiliates in its online advertising and marketing campaigns.
25. Defendant Google, Inc. ...
26. Defendant Yahoo! Inc. ...
27. Defendant Microsoft Corporation ...
...
30. dazzlesmile is an internationally known teeth whitening system. The system was first introduced to the general public in October 1996, during the course of a clinical study conducted by F. Richard Austin, DDS, a cosmetic dentist, and Blaine D. Austin, DDS, MS, a maxillofacial surgeon. Their research study entitled “Clinical Evaluation of In Vivo Effects of Orally Administered Carbamide Peroxide Bleaching Agent Dispensed in Tablet Form” ultimately culminated with the issuance of United States patents 5,785,957 and 6,149,211 on July 28, 1998, and November 21, 2000.
31. The dazzlesmile teeth whitening system is comprised of teeth bleaching and dental hygiene products, currently consisting of orally administered mint whitening tablets, whitening toothpaste and a mouth wash. The clinical research described in the preceding paragraph demonstrated the efficacy of dazzlesmile ― and dictated that any dazzlesmile products containing carbamide peroxide in the U.S. must be registered with the United States Food and Drug Administration (“FDA”) and manufactured in an FDA-approved facility. dazzlesmile is considered an Over-the-Counter (“OTC”) drug and is required to be so labeled with specific drug facts.
...
44. On January 26, 2009, Carson Parmalee (“Parmalee”), a Sales Manager for Epic contacted Roger LeFevre (“LeFevre”), the Chief Executive Officer of Optimal and dazzlesmile.
45. Parmalee represented and held himself out to be acting for Defendant Epic Advertising: he claimed to be a Sales Manager for Epic Advertising in New York City, he had an Epic Advertising email address, and he provided LeFevre with an “Epic Advertising Quick Reference Guide” and other materials.
46. The materials provided by Paramelee also said that “AzoogleAds” was a “division of Epic Advertising.”
47. In materials provided by Parmalee to LeFevre on January 26, 2009, Epic represented:
...
i. that once Epic “identified and confirmed a policy violation,” it would redress those issues through a number methods, such as “cut[ting] that Publisher’s links, recoup[ing] commissions, and/or suspend[ing] or terminat[ing] a Publisher’s account”;
j. that its “Search Policy prohibits Publishers from engaging in trademark infringement, forbids them from using potentially misleading terms (e.g., “Free”) or utilizing certain images . . . as part of their search marketing efforts”;
...
50. Parmalee told LeFevre that one of Epic’s current clients, a producer of teeth whitening products allegedly similar to that of dazzlesmile, had experienced great success with Epic’s advertising efforts.
51. On information and belief, the aforementioned client of Epic’s was Farend, Jesse Willms or another of Willms’ entities.
52. Parmalee pushed a continuity offer on LeFevre, with which Epic was “having a lot of success.” Parmalee explained that a continuity offer meant that a customer would be offered a free trial or sample for a very minimal cost and, that, after “a 14-30 day free trial period, the customer [would] then [be] billed for the full amount of the product” and continue to receive future shipments of the product billed at full price.
53. On information and belief, Epic encouraged, and still encourages its clients to adopt the continuity offer model because, coupled with Epic’s 15 day payment remittance requirement for its clients, it generates massive profits for Epic with little potential downside. In particular, the 14-30 day free trial period ensures most customers will not complain or cancel their orders until after Epic’s clients have already submitted payment to Epic for those orders. If the customers cancel after that point in time, Epic’s client would take the loss (i.e., what it already paid Epic plus the value of its products sent to the consumer, unless returned, less the minimal shipping costs received from the consumer on the front end).
57. Parmalee and other Epic representatives recognized and were impressed that dazzlesmile had an actual customer service department. LeFevre did not appreciate the significance of this recognition until later.
58. In good faith and reasonable reliance on the representations of Parmalee and other Epic agents, Optimal agreed on April 9, 2009 to run an advertising campaign through Epic in relation to dazzlesmile’s products.
59. In running an internet advertising campaign, Epic purported, and still purports, to use “publishers” or “affiliates” in order to propagate internet ads for an advertising campaign. Those publishers or affiliates creates additional web pages that contain testimonials, customer reviews, blog postings, and other materials purportedly designed to convince consumers to sign up for various products. Those publishers and affiliates are agents or employees of Epic and operate under the control of Epic and on behalf of Epic in return for payment by Epic.
...
61. Despite all of the prior representations and materials saying that Optimal was dealing with Epic Advertising, the actual agreement appeared to have been with, and was signed on behalf of, Azoogle.com, Inc., 60 Columbia Way, Suite #310, Markham, Ontario, Canada, although the agreement also referenced “AzoogleAds” and “Epic Advertising.”
...
65. Not surprisingly, Epic said that a CPA at or above $40 was the “most important” aspect of the pricing. This would be paid by Optimal to Epic after each order was placed.
66. But simultaneously, Epic also encouraged Optimal to set a “free trial” with a low shipping cost around $3.99 per order, which Epic said was the second most important pricing component, no doubt because it was meant to stimulate sales and thus payment of CPAs to Epic.
67. Epic also encouraged Optimal to set a high “bill rate” to be charged later to the consumers “so you are sure to make your money back with the second billing cycle.”
68. In addition, each advertisement and internet landing page contained a particular “sales tracking firing pixel” entitled “AZJMP” – a code that identifies that Epic created the ad that led to the sales transaction (the “Epic firing pixel”).
69. Epic used the Epic firing pixel to keep track of CPAs associated with a particular advertisement and advertiser for purposes of collecting payment for those orders, as well as to identify the publisher or affiliate who brought the customer to the landing page for purposes of paying that publisher or affiliate for doing so.
...
71. Ultimately, Optimal agreed to pay Epic $43 per order generated by Epic’s advertising campaign. That $43 was deemed to have been earned when an order fired via an Epic firing pixel, subject to a fifteen (15) day payment term.
72. In the end and as a condition of Epic running the dazzlesmile internet advertising campaign, Epic mandated that Optimal have dazzlesmile run a promotion where potential customers could sign up to receive free product and only have to pay shipping and handling. Epic then required that as a condition for receiving this free product, customers tacitly agree to receive continued shipments of the product at the full price through the “terms and conditions” page of the www.dazzlesmile.com website.
..."
"...
73. Optimal told Epic that it would not say “free” in connection with the dazzlesmile promotion as the customers were obligated to pay some money. Epic agreed to that condition, but mandated that the terms and conditions for the auto-ship for additional product be placed in a specific place on the landing page (in lightly grayed, fine print text below and/or out-of-sight of the credit card input fields) or on a separate page on dazzlesmile’s home page, found only by a link at the bottom of the trial offer landing page(s).
..."
This same structure of hidden "disclosure" is still present in several related "landing pages" examined even today.
This intentionally obscured "disclosure" is apparently the only basis for the alleged "contract" under which the charges are crammed, and on which several debt collectors are allegedly attempting to collect when consumers block charges.
Some products under related tradenames may not be manufactured under FDA guidelines, which might make them technically "adulterated", which in turn would make them "contraband".
"...
108. The pen shaped gel applicators with teeth whitening materials are available for purchasing in bulk at extremely low cost from Chinese producers. The applicators purchased overseas do not contain any labeling and do not appear to have been manufactured in accordance with FDA guidelines.
..."
http://www.killphishing.com/MegaScam.htm
This site notes the use of phony testimonials recommending use of multiple of the products together, which would maximize the opportunity for charge cramming under multiple names all at once, before the consumer got wise.
Several consumer complaints have noted that they were taken in by such phony testimonials, and got scammed several times at once.
Note the list of phony sites made to appear connected to radio or TV stations.
The "Dazzlewhite" lawsuit mentions that one of the promotions used by Epic was to create phony rave review sites.
Note that the use of fraudulent reviews and testimonials was one of the counts in the Utah enforcement action.
Current FTC rules require that internet reviews identify any connection with the company or product being reviewed.
What has been puzzling up to now is how some 22 year old punk in Alberta Canada would have the expertise to set this whole thing up, complete with multiple shell corporations, including some based in Cyprus.
What is clear is that the people behind this have experience with setting up this type of scheme.
Charge cramming AG lawsuits
http://myfloridalegal.com/webfiles.nsf/WF/MRA ... ssComplaint.pdf
http://www.oag.state.tx.us/oagNews/release.php?id=3064
http://www.oag.state.tx.us/newspubs/releases/ ... lements_pop.pdf
http://www.oag.state.tx.us/newspubs/releases/ ... ments_AFJPI.pdf
http://www.azag.gov/press_releases/june/2009/ ... s%20Release.pdf
http://www.illinoisattorneygeneral.gov/pressroom/2009_08/20090819.html