Government Actions

StoresOnLine has sold services and e-commerce sites on a non-refundable basis because they defined their product as a “business-to-business” service. However, many states have re-defined the area of law that distinguishes consumer transactions, from business to business transactions.

December 18, 2006
On December 18, 2006 a press release from the Illinois Attorney General’s office announced that a lawsuit had been filed in Madison County Circuit Court against StoresOnline, Inc. and Galaxy Mall, Inc. (“Defendants”) for misleading consumers with false promises to help them set up internet businesses. In contrast to the sales pitch of the Defendants, the press release indicates that the products are not easy to use, and even consumers with computer experience were not able to set up their online stores; the Defendants refused to cancel contracts and provide refunds, even when consumers attempted to cancel within the first three days; and the Defendants failed to provide the promised technical support for the products. The press release indicates that 15 Illinois consumers paid a total of over $91,000 to the Defendants to set up online businesses, but none of the consumers succeeded in setting up an online business or in obtaining a refund from the Defendants. The lawsuit seeks a civil penalty of $50,000 and additional penalties of $50,000 for each violation found to have been committed with intent to defraud. The lawsuit further asks the court to rescind the contracts and order the Defendants to pay restitution to consumers and pay all costs for the prosecution and investigation of the case. This case is currently pending.

March 19, 2007
On March 19, 2007 a Consent Judgement was entered into between the Indiana Office of the Attorney General and the defendants Imergent, Inc. and StoresOnline, Inc. (“Defendants”). The Consent Judgment does not constitute an admission by the Defendants of any wrongdoing, nor shall it be construed as an abandonment by the Attorney General of his position the Defendants violated the Indiana Business Opportunity Transaction Act and the Indiana Deceptive Consumer Sales Act. The Defendants are permanently enjoined from making the following representations: (a) the investor may or will earn an amount in excess of the initial payment as a result of the investment; (b) a market exists for any goods to be made or services to be rendered by the investor; (c) the seller may buy from the investor any goods to be made or services to be rendered by the investor; (d) the seller or a person referred by the seller to the investor may or will sell, lease, or distribute the goods made or services rendered by the investor; or (e) the seller may or will pay to the investor the difference between the initial payment and the investor’s earning from the investment. The Defendants shall pay: $19,261.48 for distribution to certain investors; $2,708.00 for the Attorney General’s costs of investigating and prosecuting the action; and $9,841.64 to the Office of the Attorney General, Consumer Protection Fund for a total monetary judgment in the amount of $31,811.12. The Defendants also agreed to cooperate with the Office of the Attorney General in the resolution of any future written complaints the Consumer Protection Division receives.

October 5, 2007
On October 5, 2007 the Australian Competition and Consumer Commission commenced legal proceedings against StoresOnline International Inc and StoresOnline Inc (collectively StoresOnline). From early October 2006, following the settlement of the earlier proceedings, the ACCC alleges that StoresOnline contravened the s.87B undertaking in various ways and on numerous occasions during the course of those further presentations. In an ex-parte hearing, a Federal Court made various orders regarding service of the proceedings upon the two StoresOnline companies. One of the orders sought by the ACCC in the present proceedings is an interlocutory injunction restraining StoresOnline from conducting further presentations to sell and promote their home business e=commerce software packages until the proceeding has been determined on a final basis. The need for this order and the urgent nature of the proceedings generally arises as a result of advice received by the ACCC from StoresOnline that they are returning to Australia in October 2007 to conduct further presentations. Apart from the interlocutory injunction referred to above, the ACCC is also seeking the following: 1) declarations that StoresOnline has contravened s.78B of the Act; 2) a range of injunctions to ensure that the s87B undertaking is complied with in the future; 3) an order that StoresOnline pay to the Commonwealth an amount up to the amount of any financial benefit which it has obtained, directly or indirectly, which is attributable to the alleged breaches of the s.87B undertaking; 4) an order directing StoresOnline to compensate any other person who has suffered loss or damage as a result of the breach of the s.87B undertaking. The case is currently pending in the Federal Court.

October 23, 2007
On October 23, 2007 the Utah Division of Consumer Protection and the Utah Department of Commerce (“Division”) entered into an agreement with iMergent Inc and StoresOnline Inc. It was agreed that within 45 days of the agreement StoresOnline would include the following disclosures on all of its initial solicitations to customers regardless of whether the solicitation or advertisement is by letter, flyer, postcard, email, Internet website; Internet banner advertisement, or any other form: 1. Contain at least one notation on the front page in the solicitation containing the name StoresOnline or alternatively “StoresOnline.com”; 2. Reference that the training session is “presented by StoresOnline” or alternatively “StoresOnline.com”; 3. Provide a current mailing address somewhere in the solicitation for StoresOnline; 4. Provide information to clarify if StoresOnline maintains a relation with any company referenced or otherwise included in the solicitation; 5. Contain language to the effect that the person who is solicited may “discover how entrepreneurs and small business owners are creating incomes using the internet …”; 6. Include the following language in the solicitation “StoresOnline offers goods which could allow entrepreneurs and small business owners to develop a web site for selling the product of their choice. The Company assumes any interest you may have in attended the conference is for your current business, and/or your are looking for ways to promote and sell a product, service or idea, none of which will be provided by the Company.”

It was agreed that StoresOnline would have each of its purchasers sign a “Certificate” which may be included in the “business to business order form” or included in an “important notice”. In the even the Certificate is not included in the “business to business order form” it must be separately signed by the customer. In conjunction with the signing of this agreement, the Division agreed to dismiss without prejudice its citation in the administrative action of entered in May of 2007. Should the Division receive a complaint from a purchaser who was sold StoresOnline’s product after the effective date of the agreement and it is found that StoresOnline failed to comply with the terms of the agreement; StoresOnline would provide the purchaser with a full and complete refund. StoresOnline further agreed to include the following notice written with no less than 12 point font:
“YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. IN THE EVENT THE BUYER IS 65 OR OLDER THEY SHALL BE PROVIDED 15 DAYS AFTER THE DATE OF THIS TRANSACTION AFTER WHICH RESPECTIVE TIME PERIODS, ALL SALES ARE FINAL.”
This provision shall not apply when prohibited by local law.

StoresOnline further affirmed that it would: a. regularly update standards and procedures on its software as the Internet changes to attempt to keep its software compatible with most other ISP hosting services; b. require any party who provides an earnings claims to provide a “declaration” that the information used is true and correct to the best of their knowledge; and c. allow prospective purchasers an option to buy just a single website.

April 1, 2008
On April 1, 2008 the Connecticut Attorney General entered into a settlement with Storesonline, Inc. and Imergent, Inc. As part of the settlement, Storesonline, Inc. will pay $130,000 to the state and in restitution to consumers. The agreement settles allegations that the company’s online businesses made exaggerated and deceptive claims regarding its virtual storefronts. Under the settlement, Storesonline, Inc. will pay the state $65,000 and another $65,000 in restitution to Connecticut consumers who bought its services.

May 19, 2008
On May 19, 2008 the Wisconsin Department of Justice settled a consumer protection lawsuit against iMergent, Inc. and StoresOnline, Inc – which sell internet marketing software and commercial website services throughout the United States, under the name StoresOnline. According to the lawsuit, StoresOnline’s solicitations have violated Wisconsin law by failing to identify StoresOnline as the entity offering the products and services, instead using fictitious business names. They further violated Wisconsin law by failing to disclose that the purpose of the workshops was to sell internet-related software and services. Under Wisconsin’s law regulating direct marketing and mail solicitations, entities are required to disclose the name of the principal seller, identify that they are offering for sale a good or a service, and identify the nature of the goods or services for sale. The law also prohibits the use of fictitious names which can confuse or mislead the seller’s true identity. Under the terms of the settlement, iMergent, Inc. and StoresOnline, Inc. must pay the state of Wisconsin $50,000 in forfeitures, penalty assessments, and investigative costs. The companies also must disclose in its solicitations the identity of the seller, the purpose of the solicitations, and the nature of the goods and services being offered. In addition, they must provide a notice cautioning prospective purchasers that they should not attempt to establish a web-based business if they lack basic computer skills or a viable business to market on the internet.

May 28, 2008
On May 28, 2008 the Oregon Attorney General’s Office announced a settlement reached with iMergent, Inc and Storesonline Inc for alleged violations of Oregon’s Unlawful Trade Practices Act. The settlement in is response to an investigation by the Oregon Department of Justice (DOJ) which was launched in 2007 after consumers complained about misleading seminars promising to teach attendees how to “make money on the Internet” by teaching them how to identify successful products, suppliers and drop shippers; secure first page positions on major Internet search engines; and create lucrative business websites on their own despite having only “surf and send e-mail” web knowledge. Consumers paid thousands of dollars to the companies and to third party contractors in order to fully build the functioning site and business plans. iMergent, Inc and Storesonline Inc recently paid $31,000 in restitution to satisfy the complaints of six Oregon consumers. In the future, the companies must fully disclose the costs associated with the program; not misrepresent the ease of learning the web skills; and provide a consumer warning that consumers’ information may be sold or distributed to others, including businesses. In total, both companies paid $33,000 to the DOJ Consumer Protection and Education Fund.

August 6, 2008
On August 6, 2008 the North Carolina Attorney General’s office announced a consent judgment with iMergent and StoresOnline, Inc. According to the terms of the judgment the companies have agreed to: change the way they represent their services to potential customers, make it clear when individuals who offer testimonials about their services have been paid to do so, and inform consumers of their right to cancel the service. iMergent and StoresOnline will pay refunds to all qualifying North Carolina consumers. In order to qualify for a refund, consumers must have purchased the company’s services before August 7, 2008. Under the agreement, iMergent and StoresOnline will be required to fully inform consumers about the requirements to use their products and services such as: owning a computer, having an Internet connection, having access to a product to sell, having access to an email account, and having moderate technical computer skills. The companies will also be required to notify consumers in writing about their refund policy and consumers’ three-day right to cancel, which is extended to 15 days for consumers over the age of 65. The consent judgment has been submitted for approval to the Business Court Judge.

September 2, 2008
On September 2, 2008 the Florida Attorney General’s office announced a settlement with StoresOnline Inc and iMergent. According to the settlement, StoresOnline and iMergent must change their marketing practices and make refunds to more than 150 Florida consumers who filed complaints about the companies. The companies must also make refunds to Floridians who complain about them within the next 18 months. The settlement agreement is in response to consumer complaints filed with the Attorney General and other agencies that StoresOnline and iMergent products were often impossible to use and that promised technical assistance was only available for thousands of dollars in extra charges. Consumers also stated that they were not able to find business partners whose goods they could sell on websites. Under the settlement, StoresOnline and iMergent are prohibited from claiming that their products are easy to use. The companies will also have to disclose that technical assistance may be costly and that neither company will help customers find business partners. In addition to consumer restitution and altered business practices, StoresOnline and iMergent will reimburse the state $125,000 in fees and costs. Florida consumers who wish to file a complaint and request a refund may contact the Florida Attorney General’s office at (850) 414-3300 or online at http://myfloridalegal.com/contact.

March 16, 2009
On March 16, 2009 the California Attorney General’s Office announced an agreement with iMergent and Storesonline in response to allegations that the companies falsely promised consumers that they could get rich by selling merchandise over the internet. This agreement resolved enforcement action brought against the companies in 2007. The companies have agreed to: a) pay $147,600 for full restitution to California consumers who have complained to the Attorney General’s office, the Ventura County District Attorney, or directly with Storesonline; b) pay $202,400 for restitution to California consumers who submit complaints within 90 days; c) cancel all outstanding financing contracts for consumers who have complained; d) Storesonline will also sent a letter to all California purchasers who have bought since January 1, 2008, offering them a 15 day period within which to cancel the transaction and receive a refund; e) register with the state as a seller of Seller Assisted Marketing Plans; f) provide a 15 day right to cancel for purchasers over the age of 65; g) disclose clearly the circumstances under which Storesonline will charge consumers a web site hosting fee, and provide consumers the opportunity to opt out of hosting websites with iMergent and Storesonline; and h) provide the Attorney General’s Office with recordings of sales presentations and notify the Attorney General and Ventura County District Attorney’s Office when sales presentations take place in California, so they can be monitored.

On August 6, 2009 the Washington State Attorney General’s Office announced an agreement with StoresOnline that provides refunds for Washington customers. The agreement does not include an admission of guilt or finding of wrongdoing, but requires StoresOnline and its parent company Imergent, Inc. to pay up to $75,000 in restitution to customers in Washington, as well as $25,000 in civil penalties and $75,000 in attorneys’ fees and costs. The companies also agreed to restrictions that prohibit them from engaging in deceptive business practices in the future.

…and I just came back from their seminar. I liked what the presenter said, and signed up for the one-day training. Maybe that’s an oops…but I wasn’t going to sign up for the Pro service, not at my income. There are disclaimers on their presentation that say the examples given are not typical, and that the results of your Internet business are what you do in marketing and promotion, not guaranteed. If you are considering going with these people, do read up, not only here on the BBB report, but also on the AAA report [BBB provides a link there], and also read current reviews to see what people are saying about them. I still want to attend the all-day training, and I will post about what I thought about it.

Posted via web from Dannis’ Posterous From DanniStories

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