Judge sides with Washington Attorney General in consumer protection case against three companies and their owners
SEATTLE – The owners of an e-commerce company sued by the Washington Attorney General’s Office for repeatedly failing to deliver on their promises to help businesses nationwide sell their products online must pay for their actions, a judge decided.
“The defendants made their living by taking thousands of dollars from small businesses, promising services they couldn’t deliver, then closing shop as soon as customer complaints rolled in,” Attorney General Rob McKenna said. “Thanks to the excellent work of Senior Counsel Paula Selis and our Consumer Protection High-Tech Unit, these operators must cease their deceptive practices and pay back everyone they cheated.”
The Washington Attorney General’s Office filed the civil lawsuit in May 2009 in King County Superior Court against three Washington men: Jeremy Avey, Alexander Martin and Brent Stanphill. Also addressed in the suit are the businesses the men operated, including Cybercom Technologies, which did business in Bothell as Wizy-Wiz eCommerce; TNT Cart, which also operated under the name Strada Technologies in Kirkland and Seattle; and White Crane Technologies, which operated in Redmond. Since starting their operation in 2005, the defendants have used at least eight business names and various locations in the Seattle and Eastside areas. Their most recent business name is ABC eCommerce.
Documents filed by the state describe how the defendants played one small business owner who paid White Crane Technologies $8,700 in 2006 to provide a Web site and hosting services. When the Indiana woman called to inquire why the work wasn’t completed, she received a recording that the phone number wasn’t in service. A few months later, she received a call from TNT Cart, offering to rebuild her Web site. Unaware that TNT Cart was essentially the same business that had taken her money earlier, she paid $2,800.
In her complaint to the Attorney General’ Office, the Indiana woman wrote:
“I also told him my sister and I had been ripped off by a company called White Crane in 2006 and we could not afford for this to happen again. He said that he had heard of them, but his company was not like them. I then explained to him that I could not work outside of my home because of a car accident and only have a small income from Social Security and that I could not afford it. He came back with he was in an car accident and lost both legs and if it wasn't for TNT CART giving him a job, he would be were I was. Then he asked me to hold on while he rolled over in his wheelchair to talk to his boss about what they could do for me.”
A defense attorney later said the caller was not in wheelchair.
Again, the Indiana woman’s Web site wasn’t completed. Finally, she was contacted in 2010 by Wizy-Wiz, offering to make her Web site operational for “no charge.” But no work was done.
The attorney general’s suit accused the defendants of making misrepresentations about the quality of their services, neglecting to deliver services as promised, providing poor customer service, not honoring money-back guarantees and making unauthorized charges to consumers’ debit and credit accounts. The defendants were also accused of failing to register as a commercial phone solicitor.
After failing to adequately reply to requests by the state and court that they provide information about their customers, the defendants were prohibited from opposing the state’s claims. King County Superior Court Judge Julie Spector granted the state’s motion for summary judgment following oral arguments on Dec. 3, finding that their practices violated Washington’s Consumer Protection Act and Commercial Telephone Solicitation Act.
“Judge Spector agreed with our case and criticized their callous treatment of consumers and greed,” Selis said. “She gave us everything we asked for – injunctive provisions, civil penalties and restitution.”
[UPDATE – March 29, 2011] – Following the judge’s decision, the state and the defendants negotiated a stipulated judgment filed in King County Superior Court. The agreement requires the defendants to pay up to $80,000 in restitution to eligible consumers and $80,000 to help reimburse the state for the costs of the investigation and litigation.
The stipulated judgment includes a long list of injunctive provisions that prevent the defendants from making misrepresentations in connection with any Internet business. Failure to comply with the terms would trigger a civil penalty of up to $25,000 per violation.
Information about the restitution will be available online at www.atg.wa.gov/settlements.aspx.
Motion for Summary JudgmentOrder Granting State's Motion for Summary Judgment
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