SEATTLE – A Washington-based company that sells search-engine optimization services to small businesses is prohibited from selling or advertising them to new customers and must permit cancellation of existing contracts, according to a settlement announced today by Attorney General Rob McKenna.
Internet Advancement, of Redmond, which also does business as 4GreatBuys.com, was accused of misrepresenting its ability to provide top search-engine rankings and increase Web traffic, even after being sued by the state.
“The Attorney General’s Office has repeatedly proven that we won’t tolerate deceptive advertising by companies that sell products or services online,” McKenna said. “Despite our 2004 lawsuit against Internet Advancement and the company’s promise to provide good customer service, small businesses steadily complained about its services. Today’s settlement forbids Internet Advancement from advertising search optimization services to potential customers and requires it to comply with a refund program for unsatisfied businesses.”
The Attorney General’s Office sued Internet Advancement in August 2004, accusing the company of violating the state Consumer Protection Act and Unsolicited Electronic Mail Act. The parties settled with a stipulated judgment in which the company promised to change its business practices. But the state alleged the company continued to engage in essentially the same unlawful acts that gave rise to the original lawsuit. In November 2007, the Attorney General’s Office filed a petition to enforce the 2004 court order.
The petition accused Internet Advancement and three of its officers, CEO Todd Wickham, president Ken Committee and secretary and treasurer Ernesto Villamor, of misrepresenting the company’s ability to provide top search-engine rankings and increase Web traffic. They were also accused of making unauthorized charges to consumer credit cards, failing to honor guarantees and refunds, unfairly structuring cancellation policy terms and making false statements concerning the company’s standing with the Better Business Bureau and the Attorney General’s Office.
The defendants admitted that some of the violations had occurred and agreed to the new settlement filed today in King County Superior Court, but denied that all of the alleged violations were part of a repeated pattern. They will pay a $118,386 civil penalty and $35,959 in attorneys’ fees. The defendants also agreed to comply with a lengthy list of injunctive provisions or else be slapped with an additional $450,000 penalty.
Senior Counsel Paula Selis, an assistant attorney general who leads the Consumer Protection High-Tech Unit, said she believes the company will comply with the new terms.
“Internet Advancement can continue to do business provided it complies with our consumer protection laws,” Selis said. “To be sure that happens, our settlement contains very specific terms and conditions on how Internet Advancement should operate and provides for substantial financial penalties should the company commit another violation.”
According to today’s settlement, Internet Advancement guaranteed that a customer’s Web site will appear within the first 25 hyperlinks on major search engines, such as Google, Yahoo and AOL, when Internet users search for specific keywords. Customers paid $999-$3,000 in “set-up” fees and a $149 monthly fee.
Small businesses filed 82 complaints about Internet Advancement with the Attorney General’s Office between Oct. 28, 2004, and March 10, 2008. The Federal Trade Commission and Better Business Bureau also received complaints.
Today’s agreement states that Internet Advancement cannot:
- Advertise or offer search optimization services to new customers;
- Misrepresent its success rate, ability to provide top search-engine rankings or increase Web traffic or its number of repeat customers;
- Fail to disclose all material contract terms before customers have agreed to pay for services;
- Fail to respond promptly to consumer complaints, refund requests or other requests for services or information;
- Charge customer credit cards without authorization;
- Fail to process requests to cancel service or bill consumers after they have cancelled contracts;
- Represent that a customer isn’t entitled to a refund because the customer performed changes to the source code of his/her Web site unless a third-party technical expert confirms that the changes were made or authorized by the customer.
The agreement allows Internet Advancement to offer search-engine optimization services to existing customers. The company may provide Web site design services to new customers, as well, provided such services don’t include the creation of metatags or keywords or submission to search engines.
Internet Advancement agreed to a refund program. Customers eligible for refunds fall into three categories:
- All current and former customers who filed complaints filed complaints with the Washington Attorney General’s Office between Aug. 11, 2004, and the settlement date. The company must contact these customers and offer them a full refund of all funds paid to defendants, including fees for past and future services.
- Existing customers who signed contracts within the last nine months. They will be offered the opportunity to cancel their contracts and receive refunds of all pre-paid fees. Customers in this category will be contacted by e-mail within one week and must respond within 30 days to be eligible for a pro-rated refund for set-up fees and all pre-paid fees for future services.
- Existing customers who signed contracts more than nine months ago have until June 7, 2008, to contact the Attorney General’s Office request a refund. They are eligible for a pro-rated refund for set-up fees and all pre-paid fees for future services. Washington customers who fall into this category should file a complaint online or contact the Attorney General’s Office at 1-800-551-4636 (in-state calls only) or 206-464-6684 to be included in the refund and cancellation program. Out-of-state customers can call 206-464-6684. The Attorney General’s Consumer Resource Centers are open to take calls Monday-Friday 10 a.m. to 3 p.m. PDT.
2008 Second Stipulated Judgment
Internet Advancement Petition
2004 Stipulated Judgment
Kristin Alexander, Media Relations Manager, (206) 464-6432