From the TechCrunch article:

"Hundreds of well known ecommerce companies add post transaction marketing offers to consumers immediately after something is purchased on the site. Consumers are usually offered cash back if they just hit a confirmation button. But when they do, their credit card information is automatically passed through to a marketing company that signs them up for a credit card subscription to a package of useless services. The “rebate” is rarely paid."

How "Click Happy" can you get?

What immediately came to my mind was something I read from the FTC Negative Option Report back in February of 2009…

 A "characteristic of people online involves what Professor Hillman and Mr. Grossklags described as “click happy” or exuberant Internet use. Specifically, users click through webpages quickly, without paying much attention because they want to complete a given transaction. Professor Hillman cited research finding that online shoppers “enter a seamless sequence of responses, a flow state in which their sense of time and reality become distorted and their self-control is diminished.” As a result, and as discussed in more detail below, users do not read or understand the terms of agreements they enter into online."

 …which is interesting to think about in light of the report included in the TechCrunch article…"Aggressive Sales Tactics On The Internet And Their Impact On Americans" from the Committee On Commerce, Science, and Transportation's Office of Oversight and Investigations which presents a complaint in which Web Loyalty customer Chris Steffen was surprised to learn that he had been signed up for a membership to a program called Reservation Rewards which he concludes happened when he purchased movie tickets through MovieTickets.com (apparently as the result of a post-transaction sales tactic).

I think what is really insightful on Chris Steffen's part is contained in the complaint he sent to WebLoyalty (addressed to "Joni", the customer service rep he spoke with):

"Imagine yourself, Joni, getting on a computer to book movie tickets for the next big show and you're in a hurry because you and your friends decided to book movie tickets for the next big show and you're in a hurry because you and your friends decided to go at the last minute. You want to make sure you order your seats in time so you can have dinner before the show. Then, at first glance you get what looks like a coupon for 10 bucks off your next purchase of tickets. You don't read the fine print because you're in a hurry and next thing you know you're signed up for some worthless service."

In other words Chris Steffen is describing what might be considered a "self-imposed limited time offer" based on the need to take some other action (getting to the movies) quickly.

Interesting, because in the State of Texas' initial complaint against Infusion Media (Google Money Tree) one of the points included is that "the sense of urgency Defendants intentionally create discourages consumers from reading the disclosure."

Three strikes and your out (of more money)…

So in the MovieTickets.com example discussed above we potentially have the following three dangerous elements (from a consumer's standpoint):

1. A "Click Happy" customer…
2. …with a sense of urgency (to get to the movies)…
3. …having their credit card information automatically passed to a third-party company that enrolls them into a membership program in which the customer incurs monthly charges.

Internet Usability Expert Jakob Nielsen and WebLoyalty CEO Rick Fernandez seem to disagree on how well disclosed the terms of the Reservation Rewards offer is:

In the video, WebLoyalty CEO Rick Fernandez claims that WebLoyalty is "trying to make this process as simple and as clear as possible for the consumer".

But even if they continued to use the post-transaction sales tactic (simple), wouldn't "as clear as possible" mean putting the details about the monthly charges right ABOVE the button the customers click that enrolls them in the offer?

One thing is "clear". Post-Transaction Sales Tactics are great for the bottom line:

According to the TechCrunch article on Post-Transaction Sales Tactics, "Affinion, Vertrue, and Webloyalty are the three largest companies partnering on these scams. The report states that these three companies have earned over $1.4 billion in revenue from 35 million transactions. 4 million people are currently enrolled in the plans."

WASHINGTON—Attorney General Eric Holder, Treasury Secretary Tim Geithner, Housing and Urban Development (HUD) Secretary Shaun Donovan, and Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro today announced that President Barack Obama has established by Executive Order an interagency Financial Fraud Enforcement Task Force to strengthen efforts to combat financial crime. The Department of Justice will lead the task force and the Department of Treasury, HUD, and the SEC will serve on the steering committee. The task force’s leadership, along with representatives from a broad range of federal agencies, regulatory authorities and inspectors general, will work with state and local partners to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, address discrimination in the lending and financial markets and recover proceeds for victims.

The task force, which replaces the Corporate Fraud Task Force established in 2002, will build upon efforts already underway to combat mortgage, securities and corporate fraud by increasing coordination and fully utilizing the resources and expertise of the government’s law enforcement and regulatory apparatus. The attorney general will convene the first meeting of the Task Force in the next 30 days.

“This task force’s mission is not just to hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from happening,” Attorney General Eric Holder said. “We will be relentless in our investigation of corporate and financial wrongdoing, and will not hesitate to bring charges, where appropriate, for criminal misconduct on the part of businesses and business executives.”

“Through the Financial Fraud Task Force, we are making clear that the Obama Administration is going to act aggressively and proactively in a coordinated effort to combat financial fraud,” said Treasury Secretary Geithner. “It’s not enough to prosecute fraud only after it’s become widespread. We can’t wait for problems to peak before we respond. We’re seeking comprehensive financial reform to create a more stable, safer financial system and stepping up our enforcement strategy. Doing so will help to stop emerging trends in financial fraud before they’re able to cause extensive, system-wide damage to our economy.”

“To give American families the protection and peace-of-mind they need, it’s clear the federal response must be as interconnected and multi-dimensional as the challenges we face,” said HUD Secretary Shaun Donovan. “No one agency is going to be able to stop financial fraud. This Task force will build upon many of the inter-agency collaborations already underway to protect consumers and restore confidence.”

“Many financial frauds are complicated puzzles that require painstaking efforts to piece together. By formally coordinating our efforts, we will be better able to identify the pieces, assemble the puzzle and put an end to the fraud,” said SEC Chairman Mary Schapiro.

The task force is composed of senior-level officials from the following departments, agencies and offices:

• the Department of Justice;
• the Department of the Treasury;
• the Department of Commerce;
• the Department of Labor;
• the Department of Housing and Urban Development;
• the Department of Education;
• the Department of Homeland Security;
• the Securities and Exchange Commission;
• the Commodity Futures Trading Commission;
• the Federal Trade Commission;
• the Federal Deposit Insurance Corporation;
• the Board of Governors of the Federal Reserve System;
• the Federal Housing Finance Agency;
• the Office of Thrift Supervision;
• the Office of the Comptroller of the Currency;
• the Small Business Administration;
• the Federal Bureau of Investigation;
• the Social Security Administration;
• the Internal Revenue Service, Criminal Investigations;
• the Financial Crimes Enforcement Network;
• the United States Postal Inspection Service;
• the United States Secret Service;
• the United States Immigration and Customs Enforcement;
• relevant Offices of Inspectors General and related Federal entities, including without limitation the Office of the Inspector General for the Department of Housing and Urban Development, the Recovery Accountability and Transparency Board and the Office of the Special Inspector General for the Troubled Asset Relief Program; and
• such other executive branch departments, agencies, or offices as the President may, from time to time, designate or that the Attorney General may invite.

In addition, the attorney general will invite representatives of the National Association of Attorneys General, the National District Attorneys Association and other state, local, tribal, and territorial representatives to participate in the task force through its Enforcement Committee.

Michael's post, called What Is the Con Here, brings up a lot of interesting points that I missed that suggests the possibility of misdirection (my interpretation of Michael's post) going on in order to take focus off of the message and onto the messenger.

Perhaps I'm guilty of doing the same as well, but it's hard to not get upset when confronted with someone who has victimized the very type of people I try to help everyday – and who has profited handsomely from it.

But again – perhaps as Michael and Dennis Yu have suggested this only serves to take the focus off of the message. Yes, certainly the messenger needs to be penalized, make amends, etc., but for the sake of this post that's not the point.

Dennis Yu's follow up to all of this called "This is why you don't gossip on the internet" is also interesting and worth a read and I agree that when you come across attacks on a messenger that you need to "examine their motives and then check the facts to see if things add up".

I certainly don't feel like I have all the facts in this situation and I don't think it will be an easy matter to get them either.

Some might consider the rest of this post a distraction from the message and back onto the messenger. However, I think it's important as in this case as it may help people see the message as more pertinent and NOT allow it to get shoved under the table.

However, Dennis Yu does potentially clarify a couple things that I wondered about. I say "potentially" because at this point there's no way to check the facts.

1. Dennis Yu states, "We did some consulting for the FTC– a nice surprise, as they promised not to sue."

I had wondered why he was so willing to basically post a "signed confession to prove the prosecutor's case" as Lynndel Edginton observed in the original post called BlitzLocal CEO explains how to trick people.

Of course the dilemna for Dennis is if he testified or consulted for the FTC in a specific ongoing investigation then he can't say what the case was until charges have been filed.  Once he can talk about those cases, things could get very interesting again.

2. He also states, "I’m owing up to all the spam (or call it by whatever name you want) that I’ve done in the past.  The TechCrunch article was part of that– and there are more articles coming."

Why is this interesting? Because if it's true that there are more articles coming and they get published in major outlets with the same sort of prominence as TechCrunch then it puts Shoemaker's claim that "the jig is up" for Dennis Yu in serious doubt.

The bottom line is:

1. We don't have all the facts and there will be serious facts that we possibly can't have for legitimate reasons for a while.
2. We need to be on our guard for potential misdirection whether it comes from a hidden negative option offer or an attack on a messenger who is easy to hate.

Note: PLEASE keep in mind that I am only saying those two "bottom line" items are possible. I am NOT saying they are true. There simply isn't enough evidence to know one  way or another.

"Please don't send me anymore emails.  Why?  I just learned that Paul is involved in a scam  business that is cheating those of us who have trusted and believed in him. Too bad.  I'm disappointed."

Obviously this isn't true and obviously it's alarming.

It appears that one of the email addresses used in the scam was Mystery.shopper@sify.com although there may be others. Emails from http://mail.sify.com/ - which is an Indian email provider seem to be commonly used in these scams as you can see here:

Scams Using Sify.com Email Addresses

In fact one commenter in this discussion stated:

"A complaint to abuse at sifycorp.com bounced today with something "Over
quota"… After abuse at sify.com seems not to accept complaints via
Gmail since months. They did before, and ever so often I even received
feedback that they terminated accounts of Nigerian spammers."

It appears I'm in good company though, because the SAME sort of thing happened at the great site WhyDoWork as discussed here:

Beware of Data Entry Scammers Pretending to Work Here

Matt from WhyDoWork cautioned, "As we are probably the largest legitimate work at home job search engine on the web, it can be easy to believe the posting. I’m glad five people came forward to let us know of the scam. I’m hoping no one got taken in by it."

If you are aware of any scammers or scam that is using my name or the WorkAtHomeTruth site name please let me know about it here.

Thank you.

The Federal Trade Commission has asked a federal court to issue a contempt order against BlueHippo, a company that collected more than $15 million from consumers based on claims that it would finance their purchases of new computers, but delivered neither the financing nor the financed computers, in violation of a 2008 court order. The FTC alleged that less than one percent of consumers who signed up with BlueHippo received the financed computers they applied for, and undisclosed conditions to redeem “store credits” were rigged to discourage consumers from using them.

In a contempt motion lodged with the court today, the FTC charged that BlueHippo has flouted a settlement reached with the agency last year, continuing to deceive thousands of financially strapped consumers with phony promises that it would help them purchase a computer even if they have credit problems. The FTC also is asking the court to order BlueHippo to compensate injured consumers and bar BlueHippo from similar conduct in the future.

“Years of broken promises by BlueHippo have left consumers seeing red,” said FTC Chairman Jon Leibowitz. “We’re putting companies like this on notice: If you mistreat consumers and thumb your nose at the courts, we will hold you accountable.”

The FTC reached a settlement with Baltimore-based BlueHippo in April 2008 that required the company to pay $3.5 million for consumer redress and barred the defendants from further deceiving customers. According to the FTC’s 2008 complaint, BlueHippo Funding, LLC and affiliate BlueHippo Capital, LLC offered to extend credit to consumers to finance purchases of personal computers and other consumer electronics with down payments of $99 to $124, and a year of weekly or bi-weekly payments ranging from $36 to $88. BlueHippo promised to deliver the product once the consumer made 13 weekly payments. But most consumers did not receive the computers they ordered in the time promised, even after they had made 13 weeks of payments, the Commission alleged. The Commission charged that BlueHippo’s marketing tactics were deceptive, and violated the FTC Act and other federal credit statutes.

Even after this settlement order was entered by the court, BlueHippo continued to deceive consumers, according to the FTC. The company aggressively marketed itself as a computer finance company and spent the rest of 2008 signing up customers and taking their money, but failing to provide them with financed computers. The FTC’s contempt motion alleges that between April and December of 2008, more than 35,000 customers contracted for BlueHippo’s computer financing deal. But the company provided, at most, a single financed computer, failing to provide financed computers even for 2,477 customers who managed to meet the companies’ conditions. Complaints about the company poured into the Better Business Bureau. On top of all that, BlueHippo failed to submit a report to the FTC showing how it was complying with the settlement, as required by the order.

Finally, in April, 2009, after the FTC notified the court that BlueHippo was violating the settlement, the company began ordering thousands of computers. Even so, the FTC alleges that BlueHippo failed to order computers for 1,015 of the 2,477 consumers who had qualified for financing by making 13 consecutive payments and completing the required paperwork. For the 1,462 consumers who finally received a computer, BlueHippo did not even order – let alone ship – the computers within the three- to four-week time frame the company had advertised. On average, it took about six months between the time these consumers qualified for their computers and the time BlueHippo ordered the machines, according to the FTC’s contempt motion.

The FTC’s contempt motion also charged that BlueHippo failed to disclose key aspects of its refund policy. In particular, the company promised that while consumers who canceled their order after seven days could not obtain cash refunds, they could get “store credit,” which could be used to buy desktop computers, laptops, monitors, software, and televisions. But it failed to tell consumers that they would have to send a money order to cover undisclosed shipping and handling fees, as well as taxes, even if they had more than enough store credit to cover these costs – and that they could only order one item at a time.

The contempt motion against defendants BlueHippo Funding, LLC; BlueHippo Capital, LLC; and Joseph Rensin was filed in the U.S. District Court for the Southern District of New York.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

Read the original FTC press release here along with related documents

Attorney Failed to Turn Over Proceeds from Defendants’ Business Opportunity Involving Sale of Internet Kiosks to Consumers.

The Federal Trade Commission has filed civil contempt charges against an attorney who represented the marketers of an “Internet kiosk” business opportunity that turned out to be nothing more than a Ponzi scheme.

In its contempt action, the Commission charged that the attorney representing defendants in the case flouted a March 2009 federal court order that required him to turn over $238,300 to the FTC. The court had previously had determined that money given to the attorney as a retainer for his work on the case derived from the defendants’ proceeds from their illegal scheme. The court found that the FTC was entitled to that money, so that it could be used to reimburse victims of the scam.

In the March 2009 order, the court also imposed an $18.9 million judgment against the operators of the scam – Network Services Depot, Charles Castro, and several other defendants. The judgment upheld FTC charges that the defendants violated the FTC Act and the agency’s Franchise Rule by duping hundreds of consumers into buying Internet kiosk business opportunities with false promises of lucrative earnings. The judgment paved the way for the FTC to distribute more than $2 million to victims.

The civil contempt action against Jeffrey S. Benice and his law firm, Jeffrey S. Benice, a Professional Law Corporation, was filed in the U.S. District Court for the District of Nevada.

Copies of the March 2009 order and other court documents are available from the FTC’s Web site at http://www.ftc.gov/ and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

Read the full press release here along with related documents.

Related: FTC Press Release about the 18.9 million dollar judgement 

Dennis Yu of BlitzLocal states, "I finally came to this realization: People on Facebook won’t pay for anything. They don’t have credit cards, they don’t want credit cards, and they are not interested in shopping. But you can trick them into doing one of three things:

• Download a toolbar: It could be spyware (such as Zango) or something more legitimate, such as Webfetti or Zwinkys.
• Give up their email address: You’ve won a “free” camera or perhaps you’ve been selected as a tester for a new Macbook Pro (which you get to keep at the end of the test). Just tell us where you want us to ship it.
• Give up their phone number: You took the IQ Quiz, so give us your phone number and we’ll tell you your score. Never mind that you’ll get billed $20 a month or perhaps be tricked into inviting 10 other friends to beat your score."

Note: According to the TechCrunchies the FaceBook income distribution as of December 3, 2008 was:

Facebook:
Income>$60K : 65%
Income>$75K : 51%
Income>$100K : 33%

Source: Income Levels at MySpace and FaceBook users at TechCrunchies.com

Of course, demographics on FaceBook have been changing over the years, so that data may or may not be relevant although it would seem to cover a time period close to the time period that BlitzLocal CEO Dennis Yu discusses in his article.

Dennis Yu of BlitzLocal later goes on to make this statement:

"Here’s what ad networks struggle  with—to either run what ads make the most money or else be forced out by other ad networks willing to be shadier than them."

REALLY? There's no "third alternative"? I mean, don't MANY companies in MANY fields (that don't ultimately resort to incredibly shady tactics) have to deal with this issue EVERY SINGLE DAY?

And what exactly are the ad networks being "forced out of"? I'd love to hear EXACTLY what he meant by that.

Maybe what's more confusing is whether or not Dennis Yu even believes all of that or not, because later in the comments section he says to Jeremy Palmer of QuitYourDayJob.com the following:

"Jeremy,

Thanks for the kind words. See you at ASW in Vegas?

And it’s not to say all ad networks are scammers– there are good and bad ones, just like in any industry. You just have to watch out for certain types of offers and business practices."

Wait, didn't Dennis make this statement in the article:  "Here’s what ad networks struggle  with—to either run what ads make the most money or else be forced out by other ad networks willing to be shadier than them."

What's most telling in the TechCrunch article, though are these comments by BlitzLocal CEO Dennis Yu:

• "If you want to provide the pristine user experience, you’re taking a massive hit to your earnings, maybe can’t pay your mortgage, or whatever. How do you feel about that?"
• "You hit the nail on the head. We’re going the “straight-laced” route because it actually will make more money in the long run."

Read that LAST statement carefully. Doesn't it seem like Dennis Yu of BlitzLocal is implying that if it were more profitable to continue to run a shady business that's what he would do?

Also enjoyable was what appears to be BlitzLocals' Dennis Yu's attempt at a pre-emptive strike at his critics by saying, "The nature of your reaction probably says something about what you do"…and of course the usual attack on critics as “bogus moral posturing”.

In the article, I didn't see any evidence of Dennis claiming to change his ways because it was the right thing to do. Instead he pointed out that it was more profitable to go straight, and also suggested people take a look at his list of clients, which I thought was a good idea, so here they are:

• Boulder Massage Therapy and Stress Management Services
• Quiznos
• Midwest Landscape Engineering (testimonial from Jason Cade)
• Doletry Law Partners
• Eric Reeder – Animal Products Plus

Yep, certainly a pretty impressive list of clients, so it will be interesting to see how this all plays out.

Read the original TechCrunch article here, (which strangely is extremely mundane and obvious considering the amount of of accolades posted in the comments section).

What's funny is the disclaimer itself which states:

"We are not affiliated in any way with CNN, WebTV, News Channel 7, ABC, NBC, CBS, U.S. News or FOX."

WebTV? Besides of course all of those "as seen on" claims you see on all of the Google Kit products being fake, how could the claim to have been seen on WebTV even be relevant?

Besides, WebTV was purchased and renamed by Microsoft anyhow: "MSN TV2, the latest version of MSN TV is an Internet & Media Player that requires no software to buy or install. It includes: an internet media player, a wireless remote, a wireless keyboard, a telephone line T-splitter, a phone cord, an audio/video cable and a power supply. The price of the device is Free."

This reminds me of the hilarious 3HourProfits.com "As Seen On" claim discussed here.

"3HourProfits.com of Minnesota charged one Wilson consumer to begin applying their internet marketing concepts and claimed the consumer would start making a profit within the first three hours of work. After paying, the consumer was re-routed through PayDotCom.com to set up an account for the commissions she would make. The site would not let her log-in to set up, and after contacting 3HourProfits.com multiple times she has yet to receive a response or reimbursement for the $39 start up fee. 3HourProfits.com is also operating under the name of Force One Events, Inc. and they claim to be ‘ranked #1 on BBBReviews.org.’ BBBReviews.org is in no way associated with the Better Business Bureau. The name is misleading, but neither 3HourProfits.com nor Force One Events, Inc. is a BBB Accredited Business. Force One Events, Inc. has failed to respond to several complaints and has an “F” rating with BBB."

So, I decided I'd go check out the actual 3HourProfits site. And boy am I glad I did. I was treated to the funniest "As Seen On" claim I've ever seen. Tell me if you can figure out what it is in the image below:

Funniest "As Seen On" claim ever

I can see the political debates now arguing for the legalization of Google Kit scams, Acai Berry scams, Teeth Whitening scams, and all other forms of hidden negative option scams.

People protesting to reclaim their false hope

Regulators will go too far and people will cry out loud together in mass: "Give us back our right to be scammed!…Give us back our false hope!"

The poet-protestors will quote Michelangelo:

"False hope is harboured only by that love when
beauty is worn away;
Sweet hope is found in a chaste heart; it does not fail
because of changes in the husk."

And the singer-songwriter bards and rock bands will…

Oops. Sorry about all that. I think I might have started getting carried away. Anyhow, back to that ol' BBB warning thingy…

Here's what the latest BBB alert had to say. It includes many of the sites that had write-ups at WorkAtHomeTruth and other sitess over the past year or so, including:

• Google Money Tree - November 18, 2008 Warning about Google Money Tree and Google Treasure Chest is here
• Various Google Kits put out by Pacific Webworks – many of the Pacific Webworks Google Kits were discussed here
• Impact Wealth Solutions – EasyFortune500Profits was discussed here.
•  Google Success Kits – the particular one that the BBB references is called EarchCashFastFastWithGoogle – discussed here.

Of course it's always the same scenario of people getting hit with hidden charges:

"While the schemes go by many different names and are found on many different Web sites, the complaints to BBB tell a similar story. Complainants state that they signed up online to receive a free trial of a CD or access to information that would show them how to make money from home using Google. Consumers had to provide a credit or debit card number to cover shipping — which is typically only a few dollars.

Complainants to BBB state that they were billed before their trial ended — or never even received the CD — and continued to be billed after they had cancelled their order. Complainants also found mystery charges from several other businesses for services they didn’t realize they were signing up for with their “free” trial. One Georgia complainant’s bank account was debited $433 by various entities including Grant Finder, Web Training, Powersale, Safelock, Google Chest, Search Chest, A1Member and Auction Support."

You can read the full BBB alert and warning here - or you can just wait until another one just like it comes out from about another ten thousand news agencies, consumer advocacy groups and law enforcement agencies just about every single week.

Here's a short list to get you started:

• Recent MSNBC article – Twitter phishing ploy goes for "Direct Messages"
• 11/9/2009 article at ChicagoNow.com – Lawsuit: Work from Home Ads are a Scam! (Class Action lawsuit against Pacific WebWorks)
• 11/8/2009 article at the Chicago Tribune – Scams Prosper even if economy doesn't
• 10/6/2009 Pioneer Press Article – Work-at-home offers? Beware of the scams
• 11/6/2009 Central Valley Business Times article warns about Master Internet Profits – a.k.a. "Portal to Success"
• 11/4/2009 BBB alert - Arizona Work-From-Home Company Claims to Show How to Make Easy Money With Google
• 11/2/2009 News story at CNET - Spammy Scams surfacing on Twitter and Facebook

Do a few seconds of searching and you can find hundreds, if not thousands more published within the last week.

Related information:

• Make Money Posting Links on Google Scam