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Generated Wed, 08 Feb 2006 14:55:56 GMT by Prolexic.com (SI4MIA1/4.0)

That's the message I receive when I visited Stormpay's website today. People are getting very edgy, and Stormpay's website is probably being flooded with login attempts at this very moment.

The Leaf Chronicle (Clarksville, Tennessee), a local newspaper, issued another article today with statements made by Stormpay's top administration.

I have copied the text below for posterity:

Article published Feb 8, 2006
StormPay trying to resolve problem
Local company says every penny 'backed up' for victims of scheme
By JIMMY SETTLE
The Leaf-Chronicle

Clarksville-based StormPay.com issued a statement Tuesday night indicating it and another Internet company are working to resolve business disputes.

From New York to Chicago, across the West Coast and down to Atlanta — even to Malaysia and other points overseas, thousands of consumers have complained they could not access their StormPay accounts.

The Better Business Bureau alone has received nearly 19,000 complaints during the past week.

According to the statement, attorneys for LifeClicks — the owner of 12DailyPro.com — and StormPay have been negotiating the dispute.

The operator of 12DailyPro.com "after vehement denials to her customers that any investigations were ongoing, now retracts her previous statements and now admits that investigations into 12DailyPro are, in fact, being conducted by the FBI and various state investigative authorities as we have stated from the beginning," Steve Girsky, StormPay owner, said in a release Tuesday night.

Girsky asserted that 12DailyPro misrepresented its membership base that StormPay was unable to cover funds that customers had deposited into their StormPay accounts.

"StormPay's representatives have assured LifeClicks that StormPay is a viable company and is still open for business, and StormPay has provided assurances that it is able to cover, dollar for dollar with money in the bank, any deposits that may be held in any StormPay account," the joint statement reads.

StormPay has been in business since October 2002. It claims to conduct transactions in 200 countries and serves as a payment intermediary for online auction sites and other Internet businesses, with the intent of allowing customers and businesses to send and receive money.

12DailyPro, in turn, is billed as an auto-surf Web agent where customers can buy online advertising and earn commissions from advertising revenue. An "auto-surfing" program is set up to generate money every time a user visits a participating Web site.

Girsky and John McConnell, StormPay president, say they too have spent the past week fielding complaints about the accounts being frozen, with some of the complaints bearing a "threatening tone."

Pyramid scheme

12DailyPro's Internet activities are described as a Ponzi, or "pyramid" multi-level, auto-surf Web site that's claiming to build income for investors. Attempts to reach representatives of 12DailyPro — a business apparently based in Charlotte, N.C. — have been unsuccessful.

"Auto-surfing programs are thinly veiled pyramid schemes," according to a BBB statement.

Typically, pyramid schemes purport that for a relatively small investment, a huge amount of money can be earned. In order for all but the people involved early to receive money, a ridiculously large number of new participants must join.

The joint statement for StormPay and LifeClicks indicates some recent payments from 12DailyPro have been refunded back to LifeClicks by StormPay.

"We are working together to formulate an orderly and equitable reimbursement plan for refunding as many of you as we possibly can," the joint statement reads.

One complaint

Atlanta resident James Godwin is one of hundreds of people who have contacted The Leaf-Chronicle to complain about missing money.

Tuesday afternoon, Godwin said he is aware of 12DailyPro, but like most of the other people who have contacted the newspaper, he still thinks StormPay also is to blame for denying customer refunds.

Girsky said account funds have to be frozen because, "We have to protect our interests."

"I was using StormPay on an auto-surf called 12DailyPro, where you can go into their Web site and buy advertisements and get a commission from that revenue," Godwin said.

"StormPay is the processing company that pays (12DailyPro) and pays me my commissions. They have several ways of making money off of me. In fact, they charge me a fee of 3 percent right off the bat. They've got almost $4,000 of my money, counting my commissions, and at this point, I don't want my commissions.

"I just want the $3,300 that I invested in it, back. That was my life savings. It's all I had," Godwin said, adding he reported StormPay to the Federal Trade Commission on Tuesday.

FBI neither confirms nor denies

Girsky and McConnell said they are working with the FBI and other law enforcement agencies that have begun looking into frozen accounts.

On Tuesday, FBI spokesmen wouldn't confirm or deny whether any such investigation was under way, saying they don't normally comment on cases unless an arrest is made or indictment is issued.

"Right now, we are directly cooperating with the investigative agencies, and we've secured the funds of this particular merchant (12DailyPro)," Girsky said.

"Potentially, this merchant owes these customers a whole lot more money than it has available to pay them." he said, adding, "Every penny of every StormPay customer is backed up at the bank."

Girsky said the problem is that "these people are expecting returns from this merchant that it just doesn't have to pay them."

"It's a classic pyramid scheme ... but they've been 'robbing Peter to pay Paul,' and that's why they don't have the money to pay these customers,'" McConnell said.

"They misrepresented their business model to StormPay," he said. "The merchant account funds have been frozen to preserve the integrity of these funds."

He said his company is trying to respond to every customer affected as quickly as possible, but "given the sheer volume, there is currently a backlog."

"We're getting to them as fast as we can," McConnell said.

Source: The Leaf Chronicle
You may also download these additional statements from their website:

BBB statement on StormPay

Statements by StormPay, 12DailyPro

And a related article on Stormpay's shady history with the BBB in Tennessee.


It does appear that Stormpay is systematically recovering 12DailyPro related funds, by issuing chargebacks on various accounts that have received payments from 12DailyPro, and putting it back in 12DP's frozen Stormpay account. You can find screenshots and more info on 12DP's forum. For some people this spells disaster, since the accounts are linked to bank accounts and that means Stormpay will be taking money out of people's bank accounts if their Stormpay balance is negative. Don't even get started on the various overdraft & NSF charges that the banks can impose as a result of this. Members of other autosurfs are also reporting similar chargebacks.

Until now, we've only had one-sided views, half-truths and misinformation spreading through the net. The latest Leaf Chronicle article actually clarifies a few things:

1. Stormpay has a shady past, and has had numerous complaints against them filed with the BBB.
2. 12DailyPro IS under investigation by the US authorities, which the admin Charis had deliberately denied until now. This fact is no longer being denied.
3. Stormpay misled the various autosurfs & HYIPs by stating that they HAD to use only one payment processor (them) or risk losing their accounts. Was that just a ploy to get more funds into Stormpay?
4. Stormpay is taking active measures to secure those funds, by hook or by crook. This means that withdrawal requests by various Stormpay members are not being met, and various accounts have been issued chargebacks.

Now, it looks like this will only get uglier by the day.


Related sites of interest:
http://xtreamsurf.blogspot.com/...stormpay-more-illegal-activities.html
http://drunkonlife.com/Daily-Blog.html
http://autosurf-advisor.blogspot.com