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Ripoff Report
Ripoffreport.com screenshot 2007-08-29.png
URL http://www.ripoffreport.com/
Type of site Consumer
Available language(s) English
Created by Ed Magedson
Launched December 8, 1998
Current status Online

Ripoff Report is a privately-owned and operated website founded by consumer advocate Ed Magedson. The Ripoff Report has been online since December 1998 and is operated by Xcentric Ventures, LLC which is based in Arizona.[1] Ed Magedson is the site’s Editor-in-Chief.

Contents

Background

The Ripoff Report allows users to post complaints known as “reports” which contain details of the user’s experience with the company or individual listed in the report. The site requires users to create an account which includes a valid email address before reports can be submitted. There is no cost or charge to users who wish to create a report. According to the site’s Terms of Service, users are required to warrant that their reports are truthful and accurate, but the site itself does not investigate or confirm the accuracy of reports. As of February 2010, the Ripoff Report contains more than 500,000 unique reports and it frequently ranks among the top 1,000 most visited websites in the United States.

Companies who have been named in a report may choose to respond by submitting a “rebuttal” which explains their side of the story. Like reports, rebuttals may be posted for free by anyone with a user account. However, Ripoff Report may limit the number of rebuttals filed per-report and may decline to publish rebuttals in certain cases.

Criticism and controversy

Some aspects of the Ripoff Report have been the subject of significant criticism. Some of this criticism has resulted in litigation against the site. The Ripoff Report maintains a section on the site devoted to discussing many of these issues and explaining the site's position as to each issue.

Litigation involving CDA immunity and judgments against Ed Magedson

According to a United States law called the Communications Decency Act, 47 U.S.C. § 230(c), websites like the Ripoff Report are protected from most forms of civil liability arising from user-generated content. This protection applies even if the website hosts material which is false and even if the site does not take any steps to investigate content prior to publication or remove content after receiving notice that the material is false.[2] Protection also extends to editorial changes made by the website operator itself, as long as such editing does not alter the meaning of the original third-party content.[3]

Many lawsuits have been filed against the Ripoff Report claiming the site does not qualify for protection under the CDA or that such protection has been lost due to its alleged solicitation of defamatory content, its refusal to remove content which is false, and its alleged alteration and/or modification of reports or their titles. Thus far, the majority of such cases have been resolved in favor of the Ripoff Report, with several notable examples:

  • Intellectual Art Multimedia, Inc. v. Milewski, 2009 WL 2915273 (N.Y.Sup. Sept. 11, 2009) (claims against Ripoff Report dismissed for failure to state a claim due to CDA immunity);
  • GW Equity, LLC v. Xcentric Ventures, LLC, 2009 WL 62173 (N.D.Tex. 2009) (summary judgment entered in favor of Ripoff Report based on CDA immunity);
  • Global Royalties, Ltd. v. Xcentric Ventures, LLC, 544 F.Supp.2d 929 (D.Ariz. 2008) (claims against Ripoff Report dismissed pursuant to Fed. R. Civ. P. 12(b) (6) without leave to amend based on CDA immunity);
  • Whitney Info. Network, Inc. v. Xcentric Ventures, LLC, 2008 WL 450095; 2008 U.S. Dist. LEXIS 11632 (M.D.Fla. Feb. 15, 2008) (summary judgment entered in favor of Ripoff Report based on CDA immunity).
  • MAIN AND GILBERT, LLC v. ED MAGEDSON Default Judgment ; 1995 default judgment entered against Ed Magedson.

Despite its track record of successfully defending cases brought in U.S. courts, in July 2003 a default judgment was entered against the site in the Eastern Caribbean Supreme Court High Court of Justice for EC$27,100,932.00.[4] The award, made in Eastern Caribbean currency rather than U.S. dollars, has not been recognized or enforced by any U.S. Court.

Non-removal policy

One of the more controversial aspects of the Ripoff Report is its policy against removing reports. Unlike some other message boards or blogs, Ripoff Report does not allow authors to remove their own reports and the site will not remove reports in response to legal demands from attorneys. This policy is disclosed to users in the site's Terms of Service. The front page of the Ripoff Report site explains the reason for this policy as follows: “Unlike the Better Business Bureau, Ripoff Report does not hide reports of “satisfied” complaints. All complaints remain public and unedited in order to create a working history on the company or individual in question.” ( as of March 15th, 2010 this text no longer appears on the site. )

This policy was the subject of a 2007 lawsuit against the Ripoff Report which involved an author’s request to remove several reports he submitted in which he referred to a Canadian company as a “scam”. In a published federal court decision, see Global Royalties, Ltd. v. Xcentric Ventures, LLC,544 F.Supp.2d 929 (D.Ariz. 2008), the United States District Court in Arizona found that Ripoff Report was not required to remove reports in this context.[5]

In other instances, plaintiffs have attempted to accomplish the removal of reports by suing the author and obtaining an injunction requiring the removal of the offending content. In one example, Blockowicz v. Williams, ___ F.Supp.2d ____, 2009 WL 4929111 (N.D.Ill. 2009), the United States District Court for the Northern District of Illinois found that Ripoff Report was not required to comply with such an injunction.[6] Some observers have stated this outcome was legally correct but morally troubling.[7] [8] [9] On January 20, 2010, the plaintiffs in the Blockowicz case filed a Notice of Appeal to the United States Court of Appeals for the Seventh Circuit.

High search engine visibility and role of SEO

Complaints posted on the Ripoff Report are often highly ranked on search engine results pages, giving these complaints significant public visibility. Because the Ripoff Report does not verify reports for accuracy before they are published, many critics have complained that the site creates a safe haven for the publication of false or fabricated reports.[10] Other sites have argued that “Review websites [such as Ripoff Report] should be held accountable for claims posted on their sites by instilling a system to identify the validity of claims and reports.”

Due to a lack of legal alternatives, some companies affected by negative information on the Ripoff Report have employed the services of search engine optimization or "SEO" firms in an attempt to lower the visibility of Ripoff Report pages in search engine results. This has created a small but growing cottage industry of websites advertising that they can "remove" Ripoff Reports in exchange for payment of a fee.[11] [12]

Ripoff Report has been engaged in litigation against at least one SEO company. In May 2009, it filed a lawsuit against a Washington state-based SEO firm, SEOmoz.org, claiming that the site made false statements about the Ripoff Report in an article entitled The Anatomy Of A Ripoff Report Lawsuit. The Complaint also claimed that SEOmoz encouraged third parties to file frivolous lawsuits against Ripoff Report. As of February 2010, the case remains ongoing.[13]

Corporate advocacy program and extortion claims

Some of the harshest criticism is focused on Ripoff Report's "Corporate Advocacy, Business Remediation & Customer Satisfaction Program" which has been described by some as a form of extortion. The operation of the program is described in detail on the Ripoff Report website's Corporate Advocacy Program page. The program requires companies to pay a fee to Ripoff Report in exchange for which the site will act as an intermediary between the company and any unhappy customers who have posted complaints on the Ripoff Report site. Companies who join the program must agree to meet certain conditions including a promise to make refunds when requested. In return, while existing reports are not removed, the Ripoff Report's editor, Ed Magedson, will update the titles of reports to reflect that the company has joined the program and has made a commitment to increasing customer satisfaction


At least one commentator has suggested this conduct amounts to extortion and may be actionable under the federal Racketeer Influenced and Corrupt Organizations Act or "RICO":

Because a lot of us have much to gain from a strong CDA, I hope that plaintiffs will continue to press the RICO/Extortion combo. This will direct the conversation away from the CDA and focus it on the extortion elements of the case. This is appropriate because this is what makes RipOff Report’s alleged conduct so reprehensible. If RipOff report were just providing a neutral and organic platform to publish good and bad comments about businesses, no one would be complaining.

See Anatomy Of A Ripoff Report Lawsuit

On January 27, 2010, a new lawsuit was filed against Ripoff Report in California entitled Asia Economic Institute, LLC v. Xcentric Ventures, LLC, et al., Los Angeles County Superior Court Case No. SC106603. The lawsuit accuses Ripoff Report and Magedson of "attempted extortion" and RICO Act violations, among other claims. Portions of the Complaint appear to have been copied verbatim from prior cases such as Energy Automation Systems, Inc. v. Xcentric Ventures, LLC.[14]


Most recently, in GW Equity v. Xcentric Ventures, LLC, a Texas district court dismissed all claims including one that the Advocacy Program was extortionate."[15]

The Phoenix New Times reports that at least 30 companies now pay Ripoff Report for participation in the Corporate Advocacy Program.[16]

Other lawsuits

Many companies have sued Ripoff Report or Magedson.[17][18][19][20] At any given moment there are usually lawsuits pending against Ripoff Report. A new lawsuit was filed against Ripoff Report in New York in January 2010 seeking $11 million in damages. The Complaint also asserts claims against the author of the report and against Google.[21]

On February 2, 2010, another Complaint was filed against Ripoff Report, also in New York. The action seeks damages of $1 million, an injunction, and "other relief".[22]

So far, none of these cases have ever gone to trial. Some prior suits can be reviewed at Citizen Media Law Project.[23]

Ripoff Report also maintains a page which answers many frequently asked questions about its operations and explains the details of some of the lawsuits in which it has prevailed. However, this page does not discuss the cases in which Rip Off Report, or an affiliate, have lost or had a default judgment entered against them.

Several people and businesses listed on Ripoff Report have allegedly hired the Defamation Action League, an organization run by William L. "Bill" Stanley (possibly a pseudonym), who is listed as one of the world's top 200 spammers,[24] to attempt to make Magedson and his business partners remove specific reports. In return, Magedson filed a lawsuit under RICO. On June 21, 2007 a preliminary injunction was granted against DefamationAction.com and ComplaintRemover.com. Stanley and his associates were found liable for defamation and making death threats. Robert Russo, who claims not to be part of the Stanley group—but who does own ComplaintRemover.com, has filed an answer, defenses and a counter-suit in the case, which is in progress.[25][26]

References

  1. ^ Federal Document listing address
  2. ^ http://www.citmedialaw.org/section-230
  3. ^ http://www.citmedialaw.org/legal-guide/online-activities-covered-section-230
  4. ^ http://www.bad-business-rip-off.com/aylon.pdf
  5. ^ http://www.scribd.com/doc/26222684/Global-Royalties-v-Xcentric-Ventures-544-F-Supp-2d-929
  6. ^ http://www.scribd.com/doc/26223400/Blockowicz-v-Williams-2009-WL-4929111-N-D-Ill-2009
  7. ^ http://blog.ericgoldman.org/archives/2009/12/ripoff_report_n.htm
  8. ^ http://copyrightsandcampaigns.blogspot.com/2009/12/court-no-recourse-for-victims-of.html
  9. ^ http://techdirt.com/articles/20091223/0204297483.shtml
  10. ^ http://www.complaints.com/2008/november/13/Ripoffreport.com__Rip_Off_Report__Xcentric_Ventur_192701.htm
  11. ^ http://removeyourname.com/rip_off_report.html
  12. ^ http://www.kentcampbell.com/index.php?page=remove-ripoff-reports
  13. ^ http://dockets.justia.com/docket/court-azdce/case_no-2:2009cv01033/case_id-443651/
  14. ^ http://docs.justia.com/cases/federal/district-courts/tennessee/tnmdce/3:2006cv01079/37807/1/0.html
  15. ^ "Magistrate's Report in GW Equity v. Xcentric Ventures, LLC.". ripoffreport.com. http://www.citmedialaw.org/sites/citmedialaw.org/files/2008-10-08-Magistrate%27s%20Findings,%20Conclusions,%20and%20Recommendation%20on%20Xcentric%27s%20Motion%20for%20Summary%20Judgment.pdf. Retrieved 2009-01-15. 
  16. ^ http://www.phoenixnewtimes.com/2007-02-01/news/the-real-rip-off-report
  17. ^ "Carmel Cafiero: "Risky Business"". WSVN Orlando Fox 7News www.bad-business-rip-off.net. http://www.bad-business-rip-off.net/7news-ripoffreport.wmv.  video
  18. ^ Han, Nydia (November 28 2006). "Consequences of Complaining Online An Action News Consumer Special Report". 6ABC WPVI-TV Philadelphia. http://abclocal.go.com/wpvi/story?section=consumer&id=4804312. 
  19. ^ Serino, Danielle (November 29 2006). "Consumer Alert: Ripoff Report". 19ActionNews. http://www.19actionnews.com/Global/SearchResults.asp?qu=ripoff. 
  20. ^ "Elderly Couple Scammed Trying To Put Their Business Online". WOIO 19ActionNews. February 20 2007. http://www.woio.com/global/video/popup/pop_player.asp?ClipID1=1249957&h1=Elderly%20Couple%20Scammed%20Trying%20to%20Put%20Their%20Business%20Online&vt1=v&at1=News&d1=218667&LaunchPageAdTag=Business&activePane=info&playerVersion=1&hostPageUrl=http%3A//www.woio.com/Global/SearchResults.asp%3Fvendor%3Dwss%26qu%3Dbusiness+online&rnd=30110744. 
  21. ^ http://www.scribd.com/doc/26578126/Seth-Greenky-v-Jeffrey-Joslin-Xcentric-Ventures-LLC-RipoffReport-com-COMPLAINT
  22. ^ http://www.scribd.com/doc/26389351/A-1-Technology-Inc-v-Magedson-COMPLAINT
  23. ^ "Search for all Xcentric related lawsuits on Citizen Media Law Project.". ripoffreport.com. http://www.citmedialaw.org/search/node/xcentric. Retrieved 2009-01-15. 
  24. ^ "William L. "Bill" Stanley". spamhaus.org. http://www.spamhaus.org/rokso/listing.lasso?-op=cn&spammer=William%20Stanley%20/%20Ironserver.com. 
  25. ^ "Docket case nr. 2:2007cv00954: Xcentric Ventures, LLC and Ed Magedson vs William Stanley, Robert Russo, QED Media Group, L.L.C., Defamation Action League and Internet Defamation League". Arizona District Court. http://dockets.justia.com/docket/court-azdce/case_no-2:2007cv00954/case_id-344869/. 
  26. ^ "Police Blotter: Dark side of 'reputation defending' service". CNET News.com. June 29 2007. http://news.com.com/2100-1030_3-6194158.html. 

External links


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