SEO Firm Ordered to Refund Fees, Pay Fine

[Chris Sherman]

Looks like the days of promising top ten results may be ending.

"The [Washington] state attorney general said yesterday Redmond-based Internet Advancement must pay penalties for failing to get its customers top placement on major search engines. Internet Advancement, which also goes by 4GreatBuys.com, must refund customers, pay $24,432 to the state for costs incurred and a civil penalty of $25,000.

"The company had promised to get its customers ranked in the top 10 to 20 results on the search engines for $980 to $1,500 in set-up fees and monthly fees of $79.80 to $89.95."

Full story:

Internet Advancement told to refund clients
Seattle Times, Thursday, August 12, 2004
http://seattletimes.nwsource.com/html/businesstechnology/2002002970_nwbizbriefs12.html

[Incubator]

good article...1 down ...100,000 to go :)


cheers

Wc

[Elisabeth]

cool. If memory serves me correctly, and I'm pretty sure this is one I remember well - their contract was especially heinous with language - including:

"Creation of 300 "Directory Information Pages" (D.I.P) Each D.I.P will consist of a unique URL and domain. Each D.I.P will link directly to Client's web (to) specificically target the Client's "keywords" and "key word phrases"

[Incubator]

"Creation of 300 "Directory Information Pages" (D.I.P) Each D.I.P will consist of a unique URL and domain. Each D.I.P will link directly to Client's web (to) specificically target the Client's "keywords" and "key word phrases"
Very easy to read between the lines on that part of the contract !
Obvisiouly they have done damage to the client as well as themselves!

Cheers

Wc

[BlackRhino]

About two weeks ago I got a call from these guys. They wanted to do the SEO for a client of ours. We don't do the optimization for this client but we did reskin the site and we do host them. We are listed in the whois data for this client as the technical point of contact etc.
I spoke to the salesman and explained to him that we offered the service that he was selling and that I had spoken with the client about optimizing the site better and that they were adamant about having a friend do the site.
Took a bit of convincing but basically got him off the phone and thought he understood.
Not 2 minutes later he called the front desk again and asked for another person listed in the technical information on a whois lookup. I spoke to him again.

Maybe they knew this was coming. Anyway.. Thanks again for the scoop Chris.

[dstew]

It's good to see things like this happening. If it happens more, people will start to reconsider their actions before doing something stupid like this. I'd like to see more accountability in the industry for sure.

[St0n3y]

I don't understand why they just dind't give the money back. Why go to court if you know you did not meet the guarantee?

[Daria_Goetsch]

Good to hear. In other words, don't promise what you can't deliver, with organic SEO you don't have control of the rankings, the search engines do. A refund instead of court sounds like a better idea for the company.

[Chris_D]

Why would anyone offer a guarantee on anything over which they have no direct control?

[hiero]

Would it not be just as easy for the search engines to search their database and remove anyone who makes a guarantee of top placement? :confused:

[Anthony Parsons]

Why would anyone offer a guarantee on anything over which they have no direct control?

It isn't that hard actually Chris. What the company above has done is clearly worked outside of any ethical business practice and deserve to crash in hell IMHO. I am with everyone here on that. I see no problem with offering guarantees for you service, as long as the guarantee covers the client. If your not confident of your ability and knowledge of a search engine, then don't guarantee, if you are, then do it. Nobody can guarantee a specific placement IMO, that is out of everyone's control. I don't see any reason that people cannot offer a top 10 or top 20 guaranteed ranking to a client if they know they can achieve it for a given term. I give top 20, with no problems what so ever. Mind you, I don't charge like the formentioned company, I charge appropriately for the term, and quite honestly, as soon as I have a doubt in my ability to get that term, I would not guarantee it.

I personally think it comes down to several factors, the ability of the person / company and the honest and business integrity to achieve what you promise and contractually agree too or give the damn money back and wipe your hands with the loss. Obviously the terms in the above are just stupid and most of us here know they are doing more wrong than good.

Good to see that the courts are going to rid the unethical by punishing them. Quite honestly, the more clients who have the balls to stand up and be counted, take these people and companies to court will help the industry more so than any standard would.

Another 2 cents. That's 4 cents from me today....wow.

[dstew]

...I charge appropriately for the term

Oh boy, Anthony. You breached the subject of price. So, how do you charge for your services, everyone?

I charge the same for everyone, in that I charge based on an hourly basis. That's not to say that I tell them that I'm charging by the hour. I make an estimate in my head of how long the project will take and give them a set price based on that.

I also don't make guarantees. I simply give them my track record and set proper expectations. I don't promise the moon, and explain what's involved. I've had very few questions afterwards. IMHO, setting expectations is what it's all about. If they don't like mine, they can go somewhere else and get burned. :cool:

[garyp]

In addition to doing all the things mentioned in the Seattle Times article the company made:

made unauthorized charges on customers' credit cards after the customer tried to cancel the service, failed to respond to consumer complaints and sent spam to attract businesses with the misleading subject line, "Final Attempt!"

Via Office of Washington Attorney General
See: AG Gregoire Settles with Internet Advancement (http://www.atg.wa.gov/releases/rel_4greatbuys_081104.html)

[wiltonbiz]

A couple of posters asked why this scumbag company went to court, rather than just issuing refunds. I only read the online version of the Seattle Times article, but it does not say that this case went to court at all. It appears to be a penalty imposed by the State Attorney General Office for engaging in deceptive practices. As far as I can tell from the article, the state ordered them to pay administrative costs, plus the refund. This is probably a good initial approach with these lowlifes, since there is no wiggle room once they have been found in violation.

Now, of course the company involved has the right to appeal, via the courts, I am sure. But for them to do so would open them up to some really massive legal costs, if they lose. So, they won't take that chance.

I hope this case will encourage other victims to report deceptive practices, and that more of the companies who engage in it end up in bankruptcy. ;)

[mcanerin]

This highlights a big issue with guarantees: there are two types that give them, those who can be trusted, and those who can't be trusted but are trying to look like they can be.

What you get in the wash is: the guarantee means nothing, it's the companies business ethics that matter.

I've currently got a guarantee on my own site, but I've never needed to use it and even if I didn't have it I'd almost certainly refund money under the appropriate circumstances. So why have it?

Originally, the main reason was that the Google SEO Guidelines (http://www.google.com/webmasters/seo.html) say that you should look for an SEO that offers it, and I felt that was a pretty good place to start my SEO business practices from. I strongly disagree with their wording of "full and unconditional guarantee" though - no conditions? So if you are unsatisfied for ANY reason I have to give your money back? What if you are unsatisified because you don't like paying your suppliers? Or you want to buy yourself some more viagra and need the cash?

A guarantee is, at it's essence, an insurance policy. You can guarantee rankings if you are willing to deal with not getting them, the same as an insurance company insuring against natural disasters. They don't have any control over tornados either, but can make up for it by having the best statistics they can and charging appropriatly.

The only reasons to offer a guarantee, really, are twofold - a marketing method (ie lots of clients *want* guarantees) and a consumer protection one - it gives the client the right to sue over something measurable.

But you can give them the same thing with a contract. Come to think of it, I'll probably replace my guarantee page with a more specific contract. You don't do what's in the contract, you get sued. Easy and straighforward.

The only real guarantee needed is the ethics and reputation of the SEO involved. Everything else is just hype.

Ian

[Vural Cifci]

Well, all well said. But I have some more to add for the BIG SEO companies and the people shopping around. When I was making a market research for one of the companies that I was doing consulting work for I came across with companies charging $12500/month for 1 year contact to companies charging 300/hour for consulting no to be less than 30 hours setup.
These companies also tell you that you should be getting your own "WebTrends" (they don't tell you to get any web analytical tool) and only do it for 5-10 pages.
I think this is ridicilious. If anyone is interested I can tell what these companies are.(You can see some of their ads on searchenginewatch.com)
I believe more information should be broadcasted to public (so that they can at least be aware of the work to be performed) and there should be a controlling unit for the SEM firms to have some control over their pricing structure so that the potential customers are not scared away from market and the quality of the service can be better measured.(Am I going to extreme?)

[Anthony Parsons]

Oh boy, Anthony. You breached the subject of price. So, how do you charge for your services, everyone?

Yes, I do have set prices, though for the most part, not many website generally conform to them. One keyword that is mildly competitive and so forth falls into it, or a regional indifference, etc etc, the list goes on. Every site is unique and every campaign that goes with a site is unique.

The company obviously really needed to burn in hell. Good to see justice being done when required.

Ian really summed up my thoughts. Thanks Ian. Nice post.

When I was making a market research for one of the companies that I was doing consulting work for I came across with companies charging $12500/month for 1 year contact to companies charging 300/hour for consulting no to be less than 30 hours setup.

Quite honestly, its called OverHeads, nothing more. Who says that a person working at SEO Inc, for example, is any more qualified than the one man show working from his/her home office? Only difference is the overheads. The fortune 500 companies don't seem to mind paying for the overheads and getting ripped off. They can afford it. For the other 99.99% of business, they are a little more cautious of parting with there hard earned $$$ and want the same quality work at less the price. Go to just about every other SEO that isn't a large corporation and you will get it.

**************************************************

I really like that post though Ian. Thanks for politically correcting my thoughts on the matter.

[ihelpyou]

Actually, there may be one more difference with that "big" SEO company and the small one. Not only is the big one waaaay overpriced because of "overhead", but you most likely will get a "seo in training" to service you. These are the types that apply to want ads by SEO companies looking for help. They have no experience and are trained with "on the job training".

Let's look at the irony:

Big SEO: Big overhead. In training. Big Price Tag

Small SEO: NO overhead..next to none. Usually get the main person who has been at it in some cases for "years". Not so big Price.

The Large .coms and corps out there always look to the "large" sem firms for help. They are either quite naive, or they simply don't care what they are paying for as it's the perception of them "having" to deal with a big company. Either way, the large .coms are getting ripped off by these "large" SEM firms.

It's quite funny really.

[Mikkel deMib Svendsen]

ihelpyou, I think you are forgetting one important factor for many large companies: Stability and trust. Most large corporations I talk to are not happy to work with vendors that are too small and have too little cash and security. They are simply afraid they won't be here one day, or that if that "main" person become less accesible (for whatever reason) they are suddenly left with nothing.

Also, most large corporations require a great deal of paper work, detailed project management and documentation. This is often easier to handle if you are a large service company with dedicated project managers, SEOs, copy writers, internal legals etc., in my oppinion. I believe I am a great SEO, but there are parts of the overall process with large corporations that require skills that I am humble enough to accept others can do better than I.

Also, personally I have not experienced the problem you describe with large SEO forms always assigning new trainees to client tasks. In the companies I have worked for and with the most experienced senior consultants have always done most of the client work - and always the stuff that require their experienced skills. You make it sound like the skilled people in large SEO firms do nothing but teach trainees and go to the beach. Thats certainly not what i've seen on my way around this industry. But, thats just what I've seen.

[Vural Cifci]

I think you would have different opinion if you dealt with the companies that I dealt with.
1.They act like what they do can not be done anyone else.
2. They work slow. It takes them a great deal of time to go through their process to make simple changes. We are in a industry where there is no room for wasting time and not educating yourself on the last developments. Most of these people have their head burried so deep in their corporate THING they don't even follow up with what's going on.
3. God forgive,if you are a small client you are treated as ...
4. I also agree that there are large numbers of incompetent people in BIG SEO staff because whenever I started to drill down their process with my questions the people they brought on board to have a meeting wasn't anybody other than a VP or Executive Officer title. And this is only for standard questions such as how they create their reports or their criteria for managing bids.

[Anthony Parsons]

I understand and can relate to what Mikkel is saying, hence the job security and business dealings. I had worked in those environments for seven years and both my brothers still own and run multi million dollar comanies where I still see projects tied up in the tendering process six months in. I don't think it is anything that we will change here, with the thinking of corporation decisions. It stems higher than that obviously. I have personally seen and dealt with very large companies in projects that have suddenly gone into receivership......

I see no difference from this, compared to a smaller company or one person show deciding they don't want to deal any further. There are a variation of different facets that each involve and have fore and against themselves. Big business deals with big business, and they all seem to get along well. Small business seems to deal with small business well. Mix them together, and generally one doesn't like the other. The big business is only concerned about the bottom line $$$, where the little business is more concerned about the client being happy, the finished product, then the bottom line $$$.

I got out of the big business for that exact reason, I don't like concentrating on the bottom line $$$. I like the later, being both the customer and bottom line $$$.

I have seen big companies deal alot with trainee's. There is a good reason for that. The bottom line $$$. Large companies make more money charging a normal hourly rate per job and utilising a trainee at a lesser wage to produce the same end result as a more experienced person looking over their shoulder and adjusting any details before final completion. I used to do it with apprentices. McDonalds do it, and all those large franchise fast food chains. Want to make money, reduce the running costs where possible and charge the same. Quite honestly, If I ever decided to take someone on myself, I would also do it. Hire a younger non-qualified person, train them myself, pay them less until they have reached an acceptable standard, whilst still charging clients the same hourly rate for myself performing the work. Thats business and I don't really see anything wrong with it. By law, companies must have "x" amount of qualifies personel to "x" amount of trainees, so it does balance out. If you get the end result, then all is well. Only problem is, the end result with a large corporation is going to cost you alot more than with a small company.

Nobody knows everything, thus we all depend on others or "specialists" in each area to complete a final product. Problem with the bigger companies, whether all these specialists are working or not, the clients are paying for them regardless through astronomical hourly rates. A small business is simply much smarter, to outsource the work when required, thus the client is only paying for the actual hours required for legal, graphics, design, SEO, etc etc.

I honestly wonder how some of the fortune 500 companies made it to where they are. This is a valid point I think, why some of these companies generally end up in receivership....they forget where they started and how to truly make money :: Customer Satisfaction!

[St0n3y]

This is a very interesting thread. I agree and disagree with a lot being said.

re: guarantees:
[quote]IMHO, setting expectations is what it's all about. If they don't like mine, they can go somewhere else and get burned.[quote]

This is the summed-up truth. I find that I lose potential clients from time to time because they want to be told that I'll get them results in 3 months. I won't, so the'll go find somebody that will, but undoubtedly won't be able to deliver.

Over the years we've gone back and forth to offering an iron-clad guarantee, but its all about the wording. There are times when the client MUST take some kind of action and if they don't I won't want to be left holding the bag with a guarantee for results that cannot be achieved without said changes being made. On the other hand, I have also returned money to clients even without a gurantee in place only because we were unable to perform the kind of results we expected to achieve. One does not need a guarantee to be an honest practioner.

Re Pricing:

I've found that pricing for SEO is all over the map. I've found that Expensive does not necessarily mean better, but the old addage, you get what you pay for often does come into play. One must compare apples to apples as much as is possible. Its pretty cheap to throw some keywords onto a page, it takes a bit more work, and produces higher quality, to have a professional writer integrate keywords into on-the-page text. Sure, they both might achieve the same rankings, but one provides a better user experience to the user, while the other is geared more to simply "getting ranked".

I don't want to generalize here, so obvioulsy this does not apply accross the board, but my point being is that know the product before you buy. If you are happy with wal-mart quality and customer service then go to wal-mart. But you can pay more at the local mom-and pop shop for better service, and you can pay more at Abercrombie for better quality or name brand. There really is no hard and fast rule i.e. expensive=better or expensive=worse.

[mcanerin]

expensive=better or expensive=worse

LOL- that reminded me of a true story my wife told me. Many years ago when she was still in college she worked part time at one of those "dollar shops" where you can buy all sorts of cheap stuff.

They had set up this table near the doors- basically a "bargain bin" - and put a bunch of stuff on it that wasn't moving very well at the normal prices, or had damaged packaging, etc.

One item was a silver plated tea serving set. Over the period of several months the price had continually dropped on it to the point where it was being sold for about $2. No takers.

One day, the area supervisor came in and saw the table (and the tea set). One of the staff asked permission to either throw it out or give it to a staff member since it was obviously not moving and was taking up space. The area supervisor said "watch this" and, to the amazment of everyone, raised the price to $15.99. The NEW price had been $9.99. He then put it up on a shelf in plain view with the price tag clearly visible.

It sold that afternoon.

The moral is that to many people the perception of value IS related to the cost, justified or not. :D

Ian