Ken Paxton

Tuesday, November 29, 2005

Attorney General Abbott Says Agreement With Online Services Provider Will Give Consumer Refunds

SAN ANTONIO - Texas Attorney General Greg Abbott today announced an agreement with online services provider iMergent Inc. that will provide refunds totaling up to $400,000 to Texas consumers who were misled about the company’s promise to help them develop Web-based businesses.

We aggressively pursued this company on behalf of Texas consumers who were promised prospering businesses and reliable technical support from this company but were let down, said Attorney General Abbott. Consumers who were misled or who received inoperable software can now file claims to get refunds."

Only those who purchased iMergent software licenses in Texas on or after Feb. 23, 2003, and who request a refund request questionnaire from the Attorney General before Jan. 17 will be eligible.

The company, which is headquartered in Orem, Utah, has agreed to allocate $400,000 toward a consumer refund account managed by the Attorney General. In addition, the company will also reimburse the consumer for cash paid and for financed debt incurred to enroll in this program. iMergent will also pay $60,000 in attorneys’ fees to the Attorney General.

The Attorney General sued the company and its officers, Brandon Lewis and Donald Danks, in February for wrongfully enticing consumers into purchasing expensive software without providing them with key pieces of information.

The company promised to help consumers launch Web-based businesses by using iMergent software that supposedly would facilitate business creation and profit-making. However, many consumers who had limited experience in the high-tech field were not told they would need to invest another $1,000 or more for coaching and technical support to get their Web sites fully operational.

The Attorney General estimates that approximately half of the consumers who purchased the software did not succeed in getting their sites published. This was the result of the company not providing needed information concerning finding products to purchase and resell, the need for additional capital, or the technical and business expertise needed to launch an Internet business.

Under a previous temporary injunction, the company refined its communications to clarify that many consumers may need to undergo computer and technical training or acquire additional capital before engaging iMergent for its services. Company representatives must also make this clear to prospective clients during seminars around the state.

Consumers also may contact the San Antonio office of the Attorney General’s Consumer Protection Division to request a questionnaire. The address is Texas Attorney General, iMergent Refund Request, 115 E. Travis St., Suite 925, San Antonio, TX, 78205. The phone number is (210) 224-1007.