This is an archived article that was published on sltrib.com in 2009, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Pacific WebWorks insisted Wednesday it was taken unaware by a Google Inc. lawsuit accusing the Salt Lake City company of running an elaborate scam that roped in hundreds of consumers and millions of dollars by trading on Google's name.
"We have always cooperated with Google," CEO Kenneth W. Bell said in a statement distributed Wednesday. "As we review this lawsuit with our counsel, we find questionable claims that the company will vigorously and responsibly defend."
Bell and Chief Financial Officer Brett Bell did not return messages seeking further comment.
Fallout from the lawsuit continued. Shares of Pacific WebWorks, which are traded over-the-counter, fell 34 percent Wednesday after a 53 percent decline Tuesday, one day after the legal action was filed. The shares closed Wednesday at 4.5 cents after trading at a high of 39 cents in the past year.
In the lawsuit, Google said the e-commerce company operated a network of firms and Web sites that implied the Internet search giant was behind promotions for work-at-home tools with which consumers were told they could make hundreds of dollars.
Although the program was offered for "free" or with small fees, consumers ended up being charged as much as $79.90 per month on their credit cards, the suit alleges.
"After discovering that they have been duped, consumers typically find it difficult, if not impossible, to cancel the continuing charges, or get a refund of their money," said the suit, which added that consumers often received nothing for their payments.
"Those who do get something often receive DVDs containing viruses, with no information of value, or they receive a DVD or access to an online portal containing information available free of charge elsewhere on the Internet, including from Google's own free online help center."
The Google suit says that recurring charges on consumers' credit cards generated millions of dollars of revenue for the company. In recent years, Pacific WebWorks has been touting record revenues, including a 250 percent increase in 2007 over 2006.
Google spokesman Andrew Pederson said Tuesday in an e-mail the lawsuit is part of an effort to keep Pacific WebWorks and others from unauthorized use of the company's name and products.
"We believe that Pacific WebWorks and other companies and individuals collaborated to trick people into paying hidden, recurring fees using Google's name and trademarks, and we're asking the court to issue an injunction to prevent these companies from continuing to defraud consumers."
In July, the Federal Trade Commission announced a crackdown on alleged scams that take advantage of the economic downturn to lure consumers into spending money on variety of offers promising income or jobs.
Operation Short Change included a lawsuit filed in Nevada against an operation called Google Money Tree that the Google lawsuit alleges appears to be linked to Pacific WebWorks.
On another front, a proposed class-action lawsuit in Chicago names Pacific WebWorks and contains many of the same allegations as the Google suit.
In addition, Utah and Texas consumer regulators have targeted related companies with suits or regulatory actions.
According to Pacific Webworks' annual report for 2007, the latest available, these are company officers and their salaries:
CEO Kenneth Bell » $120,000
President Christian R. Larsen » $96.000
VP for Finance R. Brett Bell » $85,000
The company also offers bonuses subject to board approval