stormpay investigated by the feds

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STORMPAY SOON WILLBE OUTTA BUSINESS


http://www.theleafchronicle.com/apps...ategory=search

State agency investigating StormPay complaints
By THOMYA HOGAN
The Leaf-Chronicle


The Tennessee Division of Consumer Affairs said Wednesday it is investigating complaints involving StormPay.com, an Internet-based company in Clarksville embroiled in controversy over frozen customer accounts.

Consumer Affairs Director Mary Clement said her office has received a "large volume of complaints involving StormPay." She said once Consumer Affairs completes its investigation, law enforcement would be involved if it is determined "wrongdoing has taken place."

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StormPay owner Steve Girsky said Wednesday he welcomes the Consumer Affairs investigation. He said he plans to meet today with the Better Business Bureau to go through many of the complaints filed with them.

"I think the agencies would not be doing their due diligence if they did not check us out," he said. "I invite anyone who wants to to look at this.

"We have nothing to hide."

StormPay.com, which was launched in 2002 and does business in 200 countries, serves as a payment intermediary for online auction sites and other Internet businesses, allowing customers and businesses to send and receive money.

One of its clients, LifeClicks, owns a company called 12DailyPro, which is being investigated by the FBI and officials in North Carolina and Georgia, according to a joint statement StormPay and LifeClicks released Tuesday.

12DailyPro is billed as an "auto-surf" Web agent where customers can buy online advertising and earn commissions from advertising revenue. Under the business relationship, StormPay processed third-party payments to 12DailyPro users.

An auto-surfing program is set up to generate money every time users visit a participating Web site.

The Better Business Bureau has described such programs as "thinly veiled pyramid schemes," according to a BBB statement.

Pyramid schemes, also known as Ponzi schemes, typically promise people a large return for a small investment. But the scheme only works as long as there are new investors to cover everyone else's investment. The scheme collapses when there are no new investors.

In the case of 12DailyPro, investors signed up and bought advertising space through 12DailyPro and received commissions from visits or "clicks" on their ads. The program is free to join, but members don't get commissions unless they pay to upgrade their accounts.

A portion of the earnings is funded through incoming member fees, according to the company's Web site.

The problem, Girsky said, is that many of the people complaining about StormPay have earned commissions, but the commissions are coming from new investors. StormPay has those frozen accounts to make sure longer-term investors don't pull out their initial investment and commissions — leaving new investors with nothing.

For example, "Investor A" may start out with a $1,000 investment in 12DailyPro and earn $500 in commissions. Some of those commissions may include investments from other people.

StormPay, Girsky said, has charged back — or refunded — the entire $1,500 to 12DailyPro so "Investor A" still gets back his $1,000 and the other people whose investments contributed to the $500 in commission get back their money as well.

Several complaints to The Leaf-Chronicle allege some frozen accounts at StormPay were not connected to LifeClicks or 12DailyPro.

Girsky said he could not comment on specific accounts without permission from the account holder, but he reiterated the company is working to rectify the situation.

"We're making sure we don't process any payments for any pyramid or Ponzi scheme," he said Wednesday.

Girsky also denied allegations that checks issued to StormPay customers have bounced and StormPay has canceled customer's ATM cards connected with their accounts. He said StormPay is working to make sure people can have their money invested with 12DailyPro refunded "to the extent possible."

"Every nickel in StormPay accounts is accounted for," he said.

Clement said she could not comment on specific complaints received about StormPay.

"We are now receiving complaints from consumers, and we will continue to mediate for the consumer with StormPay, but it is in the investigative stage right now," she said in an e-mail release.

Thomya Hogan may be reached at 245-0282 or via e-mail at thomyahogan@theleafchronicle.com.


Originally published February 9, 2006

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Woooooooooooo

[mdvaldosta]

Every situation either builds trust or creates doubt. I wouldn't trust my money there, never have and never will.

[iowadawg]

Stormpay has screwed a lot of marketers not even involved in 12dp, autosurfs, or affiliate programs.
Like me!
BUt my losses are minor compared to a few top marketers who sell products using stormpay.
Got an email today, one of the top marketers on the net for ebooks, etc had his account frozen and that was over $7000!!!!

Nope, stormpay screwed too many people to survive this.
They say they have money to cover?
BS! Says states and others.

[adsneblrd]

are auto surf and randomizer sites legal

[iowadawg]

Well, to the law in the US, not really legal.
More classifed as ponzie schemes.
Randomizers....you are not buying a product, you are buying a chance to get other people to join and you get money.
That is a true ponzi!

Autosurfs, in the grey area right now.
12dp is being investigated by various agencies, including FBI.
If these agencies conclude that 12dp is a ponzi, that means ALL such autosurfs will be ponzis.

[bluemouse2]

I hope you are wrong and stormpay will stay in business for a long time

[iowadawg]

They are now in a death spiral!
They are being hit right and left with lawsuits from people who have had mega bucks stolen out of their accounts!
One thing to go after 12dp, but to steal money out of all accounts????
I got an email from one person who said that he did not believe all this crap, and he had lots of money in his account and could access it.
Until yesterday!
He logged in, and poof!!!!
His account balance zero, nothing, zilch!

All I can say is this, if you have an account, log in now and check your account.
Then get your money transferred out asap!
If sp will do that...doubtful....

And then close your account!!!!!
Let your bank and your credit card company know at once that they are not to honor any requests for withdrawals by sp!!!!!!!

Again, they have your bank/cc info and they can steal you blind!!!!

[bluemouse2]

they are refunding the users according to the latest statement: http://www.stormpay.com/

[dvduval]

I've had a number of requests to integrate Stormpay with phpLD. Should I think twice about that?

[iowadawg]

Hold off on stormpay!
What they say, is completely different than what they are doing!
They have grabbed tons of money, including mine, from legitimate businesses who were selling a product, and not having a thing to do with autosurfs, and other such schemes.

And if you read what they say carefully, sp does not say they are refunding money to those accounts where they stole the money!

More will develop over time.

[bluemouse2]

Originally Posted by dvduval

I've had a number of requests to integrate Stormpay with phpLD. Should I think twice about that?

I'm using stormpay for months without problems

[mihaidamianov]

February 11, 2006 Update to StormPay Customers.
11-Feb-2006 17:12
February 11, 2006

StormPay Inc. is currently suffering from DDOS (Distributed Denial of Service) attacks which prevent StormPay from sending or receiving email communications as well as prevents customers from being able to access their StormPay account’s through the StormPay.com website. These DDOS attacks in no way compromise the security of your StormPay account as they are only designed to prevent legitimate traffic access. Federal authorities are investigating the origination of the attacks and have confirmed that they are very close to making arrests in connection with the DDOS attacks.

We are sure that many of you are aware of the recent controversy with Charis F. Johnson and other “Auto-Surf websites”. The funds of those merchant’s and specifically Charis F. Johnson have been locked in their StormPay accounts as investigations are ongoing into what appears to be massive illegal Ponzi schemes. Any payments you may have received from these “Auto-Surf’s, that were still within the StormPay system have been restored back to the accounts’ of those ‘Auto-Surf’s where the funds are protected and preserved in an effort to try and refund customers who may have been victims of these programs. We can confirm that there will not be enough money available to get everybody reimbursed but we are formulating an orderly plan to reimburse victims to the limited extent that may be possible.

The problem we are seeing is that customers are viewing their "earnings" from the “Auto-Surfing” websites’ and believe that StormPay Inc. is holding funds sufficient to cover those "earnings". StormPay is not holding funds sufficient to cover the alleged "earnings" or "payments" or "payouts" that are reflected on the Auto-Surf’s website (we suspect we are holding only a small fraction of what is being reflected as "owed" to customers on the websites). Some customers that received a "payout" from these “Auto-Surf’s received that at the expense of somebody else who contributed to the program but who may have never received any "payout". Consequently, the reason that we have restored funds back to the accounts of these so called “Auto-Surfs” that represent payments that some members received was so that we can attempt to reimburse as many people as possible. In the usual Ponzi scheme, if you received a payment from the program it had to have come from the payments that another member made to the program. Therefore, if you have received a payment, you received someone else's money. That is the problem with a Ponzi scheme, once it collapses a lot of people get hurt. There is no way to make everybody “whole” and most people will lose money as there simply won't be available funds to make everybody “whole.” The reason that is, once people withdraw their “payouts” or “earnings” out of StormPay, that represents other peoples money, and if the only money coming in is from new “investors” (and not any other source), there is no “new” money available to make payouts or even refunds to some members.

Assume you have a customer (customer #1) who funds their StormPay account with $1000 and sends that money to one of these “Auto-Surf’s”. Then customer #2 follows up by funding their StormPay account and thereafter sends $1200 to the same “Auto-Surf”. Thereafter, the “Auto-Surf” sends $1200 to customer #1 for their percentage of promised “return” on their original “payment" and thereafter, the program shuts down as it did in these cases. In a Pyramid type operation/program/scheme there is no longer any new money coming into the program to pay back customer #2. Customer #2’s payment was what was used to pay customer #1. If this is not a Pyramid operation there should be money to refund customer #2 but there is not in this case. StormPay Inc. cannot allow customer #1 withdraw the money in his StormPay account (which was received from the “Auto-Surf”) into his own personal bank account, since it is really the money belonging to customer #2. The only solution is to reverse as many of the funds as possible so that many more victims of the ponzi/pyramid schemes can be reimbursed their original “investment”. Keep in mind that many of the first people into the schemes have already withdrawn the funds rightfully belonging to the later participants. Despite our best efforts to correct the seemingly wrong doing of these “Auto-Surfs”, there simply will not be enough remaining monies to make everyone “whole”. Again, this is due to those admins and other participants of the programs’ who have withdrawn monies rightfully belonging to others. StormPay Inc. is currently undergoing an audit, near completion, and done with our absolute and complete cooperation, which will show that every penny of money we have ever had control of can and has been accounted for.

StormPay does not permit the processing of payments for any illegal program and our Terms of Service expressly prohibit the processing of any payments for any illegal Ponzi or Pyramid scheme. Our Terms of Service do expressly provide:

“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.”


There are claims afloat that StormPay Inc. has performed unauthorized charges from customers’ bank accounts or credit cards. StormPay can, and will prove to any and all investigators that all charges made were made from each individual’s own computer, or a computer from which the customer has accessed, and was an authorized charge by that customer. StormPay Inc. intends to investigate each and every assertion wherein it has been claimed that StormPay Inc. initiated and unauthorized bank or credit card debit, and will prosecute those persons, and seek recovery of, all funds wrongfully charged back, including all costs involved to do so.

StormPay Inc. would like to take this opportunity thank it's customers for their continued support - past, present, and future. We very much look forward to the time in which all investigations have been completed and the truth is revealed to the public and our valued customers. We anticipate having access to our website in the coming hours and resuming normal business operations.

Sincerely,

StormPay Inc.
1690 Golf Club Ln.
Clarksville, TN 37043

That's the note on StormPay website as of today (US time). Although StormPay stopped accepting Romanian users (GOD, ARE WE CONTAGIOUS OR SOMETHING?) I opened an account with them before the ban. I don't have much money in it, but I'm quite interested in how things will develop.

[EGS]

StormPay is a good company..

[iowadawg]

Is that sp encouraged, nay wanted you, to get your autosurf site, your randomizer, your ponzi schem, etc onto their stormclix system!!!!!
They began, but never really policed, saying that you could advertise anything as long as it took stormpay.
A lot of scams were run through stormclix...every day, seems about 10 new randos opene up, 10 new hyips opened up, etc.
Now sp says that they are all scams?
After actively pursuing such scams for their stormclix?

No, sp is not for me!
They took my money illegally, they took the money of a bunch of people illegally.
Hope the law not only shuts them down, but prosecutes heavily all those people in stormpay management and ownership.

[demosfen]

Originally Posted by adsneblrd

are auto surf and randomizer sites legal

Yes, as long as they are very large-scale schemes that are run by the government

[Mystique]

I've using StormPay since 2002 and without problems.

I believe all it started accepting autosurf programs.
As I posted recently, I joined one just to find it was a type of scam making strange conversions between stormpay funds to egold in order to "qualify" earning what they offer.

Yesterday I found that site "hacked" by a supposed Arabic Hacker Team, but using chinese stufff... did I mention the "company" is located in Hong Kong?

Probably they self-hacked their site to disappear now that everything is going back to those advertisers at stormpay.

But back to the site, the big mistake of StormPay was accepting these schemes, thing that PayPal has been refused for long time and you see, they are not experiencing a situation like this.

Before autosurf became popular I was participating in an autosurf which never asked me for "upgrading units" as also link exchanges not offering make money to visit sites, and none of those scammed nobody ever.