StormPay has wreaked havoc across the autosurf industry. There is talk of a class action suit against them because of frozen accounts. At first it seemed that StormPay was questioning the legality of the autosurf business model but now allegations have surfaced that StormPay did this because it does not have the funds to cover accounts with various autosurfs.
Whatever the case, many will suffer because of this debacle and it is just one more example as to why you should never put all eggs in one basket.
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StormPay.com Freezes Accounts
The Better Business Bureau of Middle Tennessee alerts the public to the business practices of StormPay.com of Clarksville, Tennessee. During the first six weeks of 2006, StormPay.com has generated more complaints to BBB than any other Middle Tennessee or Southern Kentucky business.
In the past seven days, BBB has received 18,926 inquiries from consumers around the world checking on the reliability of StormPay.com.
Complaints filed by consumers from around the world state that StormPay.com has frozen their online accounts and will not release funds due. StormPay.com is an online payment processor which acts as an intermediary in the processing of funds between a web site and a customer. .Since the end of January, BBB has received over 180 complaints from users of StormPay.com. says BBB President/CEO, Kathleen Calligan. .A review of complaints filed by users indicate that the company is holding in excess of $460,000. explains Calligan.
An email sent to at least one complaintant by StormPay, states in part ..should you choose to attempt to recover your funds through other means, that conduct will result in the forfeiture of any refund..
The majority of complaints filed with BBB, concern StormPay.s freezing of accounts from users who participate in .auto-surfing. programs. An .auto-surfing. program reportedly generates money to the user every time a user visits a participating web site.
It is the position of the Better Business Bureau that auto surfing programs can post a financial risk to participants. Often .auto-surfing. programs are thinly veiled pyramid schemes cleverly devised to participants.
Due to the complaint volume, international scope of participants and amount of money involved, BBB is requesting the assistance of federal authorities for further investigation.
4Daily.com Site Closed Sunday February 5, 2006
Because of the widespread repercussions caused by the possible collapse of StormPay.com, the paid-to-surf industry's major payment processor, CashClub Inc. regrets that 4Daily.com may no longer be viable. We have been advised that we have no choice but to cease operations immediately.
StormPay will not provide us with any information or access to our account, and they claim to have "frozen" funds. But we are told by members that StormPay is reversing transactions without the consent of the members. It has been suggested that StormPay may have liquidity problems. It seems very unlikely that 4Daily.com will ever see any of the large reserve of funds that StormPay was holding.
We have some money in e-gold but not enough to continue our business. Those funds will be returned to the members who recently paid them in, over the next few days.
We are very sad that the many good operators of legitimate paid-to-surf programs who, like us, were attempting to build a prosperous advertising business over the long term, are being forced to close by this debacle. 4Daily.com and many other similar sites were NOT acting illegally. But StormPay apparently regards us all as "guilty before being proven innocent"!
Thank you all for your support and good wishes. We hope that you can move on to better things.
More information can be found at the following websites:
http://www.moneymakergroup.com/index.php?showforum=52
http://www.talkgold.com/forum/f447-StormPay.html
http://www.paypalsucks.com/forums/showforum.php?fid=19
http://forums.12dailypro.com/smf/index.php?board=4.0
http://www.abc4.com/local_news/local_headlines/story.aspx?content_id=FAFC4B6E-CD07-47AB-80CC-27BDC4253EF0
Mass Email Received From StormPay.com:
Feb 03, 2006 02:08 PM
Dear StormPay Member,
Please read this news update as it contains important information concerning your StormPay account as well as spends from your account to the "Auto-Surf" industry.
Traditionally "auto-surf" is a "traffic exchange" industry as to where persons gain traffic credits for promoting their URL (website address) in exchange for viewing websites offered by others. Any monies taken in on these types of "traffic exchanges" are normally for upgrades to have your URL (website) shown at a higher rate of exposure. For an example of how a true auto-surf works, you can visit www.autohits.dk or other sites comparable.
"Paid to click", or "Paid to Read" types of sites are normally where an advertiser pays to have his/her ad displayed and the end user gets paid a portion of the advertiser dollars for clicking on and reading/viewing the ad. The end user who is being paid for reading/viewing the advertisement does not spend any monies to participate. An example of this type of service is StormPay's own "StormClix" where participants are not charged to view advertisements and are rewarded an account credit for viewing the advertisement.
It has recently been brought to the attention of StormPay Inc. that the current rash of new Auto-Surf and Paid to Read accounts are NOT operating in the traditional manner. Further investigation by both StormPay and other outside investigational organizations/law enforcement agencies have have drawn early conclusions that these types of programs are nothing more than well hidden "Ponzi" or "Pyramid" schemes. While many of you may not agree, or wish to agree that these programs or illegally operated ponzi's, there are many facts that that are unavailable to you, or that may have been hidden by the operators of these programs. Please note that StormPay's user agreement has always banned merchant accounts for these types of activities.
Throughout the investigations into these programs, StormPay has asked the "Merchant(s)" to provide a detailed explanation of the workings of these programs including how profit margins and customer payments are made. These questions were asked point blank by StormPay while on a conference call with the owner/operator and their attorney. The requests for information from the "merchant" were simply denied leaving StormPay no choice other than to report those findings to the other organizations who required the information from StormPay. These findings and reports caused the seizure of funds of the merchant(s) StormPay accounts until all legal matters are resolved. Please be reminded that this could have been avoided if the merchant(s) could have, or would have provided information proving no illegal pyramid or ponzi activity.
Furthermore, investigations and calculations show that these merchants were already at an "upside down" point where they are/were not able to meet the financial obligations made to their program participants. These merchants who were already failing to make good on their claims seem to now be using StormPay as their "Scape Goat" for the failure of their own pyramid or ponzi scheme. These programs are always doomed to failure and for that very reason, deemed illegal. Please site the following from StormPay's user agreement:
"17. Get Rich Quick" Schemes: Get Rich Quick Schemes are prohibited resell items by StormPay. Get Rich Quick schemes include any type of self-employment, start-up businesses, or investment opportunity where the claims of profit or returns on investment are unrealistic or unsupported. By law, if a business opportunity costs $500.00 USD or more, the promoter is required to support any claims regarding earnings or profits with written documentation.
Pyramids don't pay. StormPay Inc. and the Federal Trade Commission caution consumers about clubs or programs that promise quick money for recruiting new members. Don't bank on the pyramid promise that someone else will pay you. For more information on get-rich-quick schemes, visit the FTC at www.ftc.gov."
We know that the most prominent question in your mind is "What happens to the money I sent these programs?" Answer: At the moment any funds frozens in these merchant's accounts are frozen and not payable until all investigations are completed. At such time investigations are completed, any remaining funds will be released to the merchant's, or refunded to the purchasers, based on the outcome of the investigations. Please be aware if determination is made that these are ponzi schemes, a great deal of the funds received by these merchant's will have been used to pay obligations to those who joined earlier into the programs. In other words, they will have used your money to pay other members thus creating a deficit of funds needed to refund all users. Please be patient while investigators decide the best procedures for handling this serious situation. Contacting your credit issuers or banks requesting chargebacks only compounds the problems for all involved, including the merchants and their customers, and delays returns of any funds. These actions could also be punishable by law.
StormPay will keep you updated of developments as information is available and allowed to be released.
StormPay Inc.
Rumors Put to Rest.
05-Feb-2006 08:38
Recently StormPay.com closed the accounts of what appear to be some major ponzi schemes. These account closures came as the early results of investigations into those businesses by outside investigational organizations as well as our own internal investigations.
As a result, possible victims of these businesses are attempting to retaliate against StormPay.com by spreading false rumors and performing DDOS attacks against StormPay's servers. The rumors include such things as "StormPay.com has gone out of business", "Their building has been burned down", and other falsehoods. The DDOS attacks are "Denial of Service" attacks where massive amounts of traffic is sent to the website whereby disallowing legitimate web traffic to reach the website. These attacks only prevent legitimate traffic from reaching the website and pose absolutely no threat to the security of your StormPay account.
StormPay will CONTINUE to cooperate with authoritative investigations into these businesses which very heavily appear to be nothing more than illegal ponzi or pyramid schemes. Our hopes are to get these investigations completed as early as possible so that victims can quickly be refunded monies that have been captured in those account closures. However, we must warn that those who are impeding the investigation are only slowing the process for everyone involved.
StormPay Inc.
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