More 12DailyPro Bashing by Stormpay

Stormpay released another announcement on their website. Read it, and draw your own conclusions.

February 11, 2006 Update to StormPay Customers.
11-Feb-2006 17:12
February 11, 2006

StormPay Inc. is currently suffering from DDOS (Distributed Denial of Service) attacks which prevent StormPay from sending or receiving email communications as well as prevents customers from being able to access their StormPay account’s through the StormPay.com website. These DDOS attacks in no way compromise the security of your StormPay account as they are only designed to prevent legitimate traffic access. Federal authorities are investigating the origination of the attacks and have confirmed that they are very close to making arrests in connection with the DDOS attacks.

We are sure that many of you are aware of the recent controversy with Charis F. Johnson and other “Auto-Surf websites”. The funds of those merchant’s and specifically Charis F. Johnson have been locked in their StormPay accounts as investigations are ongoing into what appears to be massive illegal Ponzi schemes. Any payments you may have received from these “Auto-Surf’s, that were still within the StormPay system have been restored back to the accounts’ of those ‘Auto-Surf’s where the funds are protected and preserved in an effort to try and refund customers who may have been victims of these programs. We can confirm that there will not be enough money available to get everybody reimbursed but we are formulating an orderly plan to reimburse victims to the limited extent that may be possible.

The problem we are seeing is that customers are viewing their "earnings" from the “Auto-Surfing” websites’ and believe that StormPay Inc. is holding funds sufficient to cover those "earnings". StormPay is not holding funds sufficient to cover the alleged "earnings" or "payments" or "payouts" that are reflected on the Auto-Surf’s website (we suspect we are holding only a small fraction of what is being reflected as "owed" to customers on the websites). Some customers that received a "payout" from these “Auto-Surf’s received that at the expense of somebody else who contributed to the program but who may have never received any "payout". Consequently, the reason that we have restored funds back to the accounts of these so called “Auto-Surfs” that represent payments that some members received was so that we can attempt to reimburse as many people as possible. In the usual Ponzi scheme, if you received a payment from the program it had to have come from the payments that another member made to the program. Therefore, if you have received a payment, you received someone else's money. That is the problem with a Ponzi scheme, once it collapses a lot of people get hurt. There is no way to make everybody “whole” and most people will lose money as there simply won't be available funds to make everybody “whole.” The reason that is, once people withdraw their “payouts” or “earnings” out of StormPay, that represents other peoples money, and if the only money coming in is from new “investors” (and not any other source), there is no “new” money available to make payouts or even refunds to some members.

Assume you have a customer (customer #1) who funds their StormPay account with $1000 and sends that money to one of these “Auto-Surf’s”. Then customer #2 follows up by funding their StormPay account and thereafter sends $1200 to the same “Auto-Surf”. Thereafter, the “Auto-Surf” sends $1200 to customer #1 for their percentage of promised “return” on their original “payment" and thereafter, the program shuts down as it did in these cases. In a Pyramid type operation/program/scheme there is no longer any new money coming into the program to pay back customer #2. Customer #2’s payment was what was used to pay customer #1. If this is not a Pyramid operation there should be money to refund customer #2 but there is not in this case. StormPay Inc. cannot allow customer #1 withdraw the money in his StormPay account (which was received from the “Auto-Surf”) into his own personal bank account, since it is really the money belonging to customer #2. The only solution is to reverse as many of the funds as possible so that many more victims of the ponzi/pyramid schemes can be reimbursed their original “investment”. Keep in mind that many of the first people into the schemes have already withdrawn the funds rightfully belonging to the later participants. Despite our best efforts to correct the seemingly wrong doing of these “Auto-Surfs”, there simply will not be enough remaining monies to make everyone “whole”. Again, this is due to those admins and other participants of the programs’ who have withdrawn monies rightfully belonging to others. StormPay Inc. is currently undergoing an audit, near completion, and done with our absolute and complete cooperation, which will show that every penny of money we have ever had control of can and has been accounted for.

StormPay does not permit the processing of payments for any illegal program and our Terms of Service expressly prohibit the processing of any payments for any illegal Ponzi or Pyramid scheme. Our Terms of Service do expressly provide:

“17. Get Rich Quick" Schemes: Get Rich Quick Schemes are prohibited resell items by StormPay. Get Rich Quick schemes include any type of self-employment, start-up businesses, or investment opportunity where the claims of profit or returns on investment are unrealistic or unsupported. By law, if a business opportunity costs $500.00 USD or more, the promoter is required to support any claims regarding earnings or profits with written documentation.

Pyramids don't pay. StormPay Inc. and the Federal Trade Commission caution consumers about clubs or programs that promise quick money for recruiting new members. Don't bank on the pyramid promise that someone else will pay you. For more information on get-rich-quick schemes, visit the FTC at www.ftc.gov.”


There are claims afloat that StormPay Inc. has performed unauthorized charges from customers’ bank accounts or credit cards. StormPay can, and will prove to any and all investigators that all charges made were made from each individual’s own computer, or a computer from which the customer has accessed, and was an authorized charge by that customer. StormPay Inc. intends to investigate each and every assertion wherein it has been claimed that StormPay Inc. initiated and unauthorized bank or credit card debit, and will prosecute those persons, and seek recovery of, all funds wrongfully charged back, including all costs involved to do so.

StormPay Inc. would like to take this opportunity thank it's customers for their continued support - past, present, and future. We very much look forward to the time in which all investigations have been completed and the truth is revealed to the public and our valued customers. We anticipate having access to our website in the coming hours and resuming normal business operations.

Sincerely,

StormPay Inc.
1690 Golf Club Ln.
Clarksville, TN 37043

What bugs me is the way Stormpay twists the facts. 12DailyPro has been using Stormpay for months now. Why is it only now that Stormpay brings up Section 17 (concerning Get-Rich-Schemes) of their TOS? Shouldn't this have been an issue when 12DailyPro first started using Stormpay? Isn't it because of all the transaction fees that 12DailyPro has generated, that Stormpay chose to remain silent? Don't bite the hand that feeds? It cannot be denied that 12DailyPro generated huge amounts of traffic and money into Stormpay's coffers.


In addition, Stormpay continues to use the media to spew propaganda and garner support for the current chargebacks done on suspended autosurf members.

Article published Feb 11, 2006
Auditors dig into frozen StormPay accounts
FBI asks BBB for records from probe into online payment processor
By MARK HICKS
The Leaf-Chronicle

Auditors were busy at StormPay.com Friday as investigators try to get to the bottom of a dispute between the Clarksville online pay processor and a client who operates an "autosurf" Web site.

"We are excited about the audit," said Steve Girsky, StormPay owner and CEO. "We have no problem with them coming in to do the audit."

Additionally, Better Business Bureau of Middle Tennessee president and CEO Kathleen Calligan said Friday the FBI has requested it receive all records the agency gathers from the BBB's investigation of complaints about StormPay and associated businesses.

Calligan said the BBB plans to issue a statement early next week after more investigation.

On Wednesday, officials with the Consumer Affairs division of the state Department of Commerce and Insurance said an investigation of StormPay was being conducted.

"We are doing everything that we can to process the complaints to the consumers to let them know that it is with the Consumer Protection Enforcement staff, and that we will let them know when the investigation is complete," Mary Clement, director of Consumer Affairs, said in a Friday e-mail.

Girsky and StormPay President John McConnell said, during an interview at their Golf Club Lane office, they were instructed not to disclose which regulatory agency conducted Friday's audit. The two say the examination will show their company has committed no wrongdoing and will "shed a positive light on StormPay."

On Feb. 1, StormPay officials froze accounts of some 30,000 to 35,000 12DailyPro.com members after receiving several complaints from members that money they earned from 12DailyPro was not being sent to them.

12DailyPro, based in Charlotte, N.C., operates a Web site that offers a 12 percent daily return on membership fees for viewing a dozen advertisements a day on Web sites. The pay is based on how much is invested in subsequent membership "upgrades."

StormPay is the intermediary that sends and receives electronic payments from 12DailyPro, as well as a number of other Internet businesses and users. McConnell said 12DailyPro member accounts comprise about 2 to 3 percent of StormPay's total customer base.

McConnell said their records indicate the last payments from 12DailyPro operator Charis Johnson to members was Jan. 8. When complaints of nonpayment came to StormPay later in January, company officials began to suspect something was wrong after Johnson was unable to answer questions about her business.

"She said it was proprietary information," McConnell said.

Steven Carr, an attorney with Nelson Mullins Riley and Scarborough law firm in North Carolina, said Friday he and another lawyer had advised Johnson to "decline all requests for interviews because the investigation was going on."

Carr, who said he was retained to negotiate with StormPay to release money it froze in 12DailyPro accounts, confirmed that he had been contacted by the federal Securities and Exchange Commission regarding 12DailyPro. He declined to elaborate further.

Carr, on behalf of 12DailyPro, released a statement Thursday evening stating StormPay officials were refusing to communicate or negotiate with 12DailyPro lawyers and they were "evaluating our legal options."

McConnell said he had talked with Carr Wednesday. Carr confirmed, saying it was a brief conversation about a fax number and "nothing substantive was discussed."

"I would like to communicate with the folks at StormPay and resolve this on an amicable basis, but I haven't heard back from them," Carr said.

McConnell said StormPay froze the accounts and is holding the money until investigations are completed to help ensure 12DailyPro members receive as much of their investment as possible.

Ponzi or autosurf

Calligan characterized 12DailyPro as a Ponzi or Pyramid scheme. Charles Ponzi in the early 20th century devised a scheme that promises huge returns to investors but pays them with money from subsequent investors, rather than revenue generated by the business.

While some legitimate autosurf sites generate money from companies that pay for Internet advertising, Calligan said 12DailyPro's only revenue is from members who "upgrade" their membership and bring in more members.

"What are you selling? It's not a product or a service ... without it, you've got a pyramid going on," she said of 12DailyPro.

Calligan said she and her entire staff of eight are now focused on investigating the more than 19,000 complaints against StormPay. "We are committed to answering each one," she said.

With the BBB investigation focusing on StormPay, Calligan said they "want to make sure that's all they're doing."

Source: The Leaf Chronicle

Please refer to revenues.blogspot.com for more News Updates


Thankfully, the authorities appear to be doing SOME proper investigation into the matter. The major concern plaguing Stormpay users, is that Stormpay takes the money and run. With the authorities watching their every move, this is probably less likely. However, it can be a real problem for many to have such large amounts of cash frozen in their Stormpay accounts.

In the above article, Stormpay claims that 12DailyPro members account for barely 3% of their customer base. Is that based on total transaction worth or total accounts in Stormpay's system? It appears that Stormpay is trying to make 12DailyPro (and other autosurfs) appear to be expendable business clients, by playing down the amount of fees generated by Stormpay from these transactions. Clearly, they don't consider the amount of fees generated by NetIBA (most of these autosurf members would have obviously got NetIBA certification for the lower fees).

What is not reported, is the fact that some people (claim they) are getting up to 3-4 chargebacks; e.g. just say someone invests $600 into 12DP, and gets $864, reinvest $600 of that, and gets another $864. The chargeback total would be $1728, when the actual money in the account is $1128. For 4 transactions, that's $3456 chargeback and $1656 actual money in system, of which $1056 is the actual 'profit'. (Notice: I have excluded transaction fees for ease of calculation).

The reluctance of Stormpay to discuss issues with 12DailyPro's legal team appears to be pure posturing, in order to gain a psychological advantage in the inevitable legal battle. By repeating the mantra of 'ponzi, pyramid, get-rich-quick, unsustainable, evil', Stormpay has already plunged the knife into the autosurf industry, and twisted it hard.

Now, for the autosurfs that do appear to provide a sustainable % ROI (% comparable to some long term HYIPs), the last few weeks have been a real setback. Irrespective of whether they are ponzis or not, many autosurfs that conducted their business using Stormpay will not recover from this fiasco.


Related links:
XtreamNet Marketing Blog: Stormpay - payment processor gone bad
Better Business Bureau of MiddleN Tennessee, Inc
BuildCash: Urgent - Stormpay Lying Again - Stop Them!
NetMoreProfit - What is Stormpay up to?
HYIPDaily - More Updates from 12DailyPro

Choosing Alternative Payment Processors

In the wake of the recent problems with Stormpay, many people have become disillusioned with online payment processors. People WANT to be able to transfer money online without having to worry about the stability of the processor. For those who participate in the GPT and Autosurf Industry, this has always been a concern.

This is not the first time we have seen problems with payment processors. In August 2005, Paypal began suspending various PTRs and similar sites, for apparent breaches of TOS. Some of the reasons given, include forbidden content (adult, casino, prescription drugs), MLMs/pyramid schemes and fraudulent transactions.

Many PTRs used to offer multiple levels of referral earnings, but this was misconstrued as MLM, which Paypal strictly forbids, in order to stay on the good side of the US legal system. Many PTRs have since stopped offering multiple levels of earnings, changing it to a single level referral system. In addition, it is not uncommon to see PTRs stating:

"___ is not a MLM (Multi-Level Marketing) website nor matrix or network marketing. Members of ___ do not have any goods to sell. ___ is not dependant on members referring new members, membership of ___ is totally free. ___ does not offer commission to recruit new members."

Paypal has had numerous complaints & lawsuits filed against them in the past, due to their policy of freezing accounts when fraud is suspected. Unfreezing of the accounts can still take months (up to half a year apparently). Nevertheless, Paypal is STILL the preferred means of online transactions for most PTRs, simply because it's so easy to fund & use. Some PTRs sell advertising on their site via eBay, so Paypal is especially useful. Paypal has been around since 1998.

Most autosurfs and HYIPs avoid Paypal, although there are a select few that still use it. The preferred online processor for these programs was e-gold. e-gold's popularity stemmed from the fact that it provided anonymity for its users. Chargebacks are not possible with the system, and there are relatively low transaction fees. The main drawback was the complicated means of funding via third party exchangers. e-gold has been operating since 1996.

In December 2005, e-gold suffered a serious drawback, with their servers apparently under DDOS attacks, and the FBI 'raiding' their US offices. This was followed by an article in BusinessWeek that criticised e-gold for being the preferred online processor for illegal transactions. The speculations were eventually put to rest, with e-gold's Chairman releasing a statement, but the damage was done. Various autosurfs and HYIPs shifted towards Stormpay - most noticeably, 12DailyPro.

All seemed fine for a while, but it wouldn't last very long. A major online ponzi known as Profits4InvestingToo began operating, offering both e-gold and Stormpay funding options (although you couldn't transfer earnings between the two processors). It grew like wildfire, and lasted for over a month, before dying out. As can be expected, Stormpay was hit by numerous chargeback attempts, as investors sought to regain their funds. This probably contributed somewhat to the current Stormpay/12DailyPro problems, since it made StormPay realise the risky nature of online programs.

Stormpay's TOS changes affect all commission based programs, ranging from PTRs & autosurfs, to HYIPs & MLMs. It seems almost like corporate suicide, considering the huge amounts of transaction fees that they are losing daily as a result. But, perhaps it is just an exit strategy deployed by Stormpay, if you believe the conspiracy theories.

In any case, Stormpay's problems has led to a deluge of alternative payment processors, some of which I have never even heard of until this week. So far, Alertpay and Uniclear appear to be the forerunners in the race for replacement killers processors, although many are returning to e-gold and EMO.


Alertpay.com is a payment processor based in Canada, and an approved member of the BBB. Its fees are comparable with Paypal, and they accept autosurfs & HYIPs (but you will have to sign up for their Secure Account, which has slightly higher fees). However, it is probably too easy to say whether it will make an impact on the GPT world. Many people feel that it may be just another Stormpay clone, with potential legal ramifications in future. Alertpay has been in business since 2004.


Uniclear.com is a another payment processor, offering debit card facilities, e-gold funding and low transaction fees. However, there have been recent complaints about customer support and slow debit card loading. There is a review on No BS HYIP Blog Community concerning Uniclear's debit card if you're interested.


Other Online Processors

Moneybookers is a UK-based money transmitter, with over 1.5 million users worldwide. However, it no longer supports autosurf sites, and Paid-To-Read (PTR) sites are also no longer acceptable. This is quite a shame, since the transfer fees are still one of the lowest in the business (most of their earnings come from customers withdrawing money from the site). See Moneybookers' fee structure.

Moneybookers is still used by various online casinos. I am not affiliated with the following gambling related sites, so do your homework if you intend to sign up.
http://moneybookers.blog.com/
http://moneybookers.freespaces.com/

There have been MoneyBookers horror stories though...
http://www.chipple.net/mt/2005/02/19_001818.php


e-Bullion is similar to e-gold, in the sense that it is backed by gold reserves. There are NO transaction fees. Instead of transaction fees, e-Bullion charges a monthly service fee of 1/3 gram of gold (compare this to e-gold's 1% yearly account maintenance fee, and 1/20 gram max. transaction fee). e-Bullion does become more cost effective than e-gold when there are multiple transactions exceeding approx. USD 600 a month (based on current gold prices). e-Bullion is registered in Panama and its primary servers are based in Switzerland. e-Bullion has been in business since July 2001. A growing number of sites now accept e-Bullion.


Other gold-based currencies include Goldmoney, Pecunix, 1MDC, e-dinar, Crowne Gold and Virtual Gold. Goldmoney currently has more gold reserves than any other gold-based competitor, but its strict verification process may limit its use in the GPT and Autosurf business. Their TOS expressly forbids pyramid & ponzi schemes. Considering the ambiguity over autosurf sites, Goldmoney does not appear to be suitable.


EMO (EMOCorp) is another payment processor, that specialises in electronic money orders (EMO). EMO allows funding to and from e-bullion and e-gold. There are no transaction fees involved with EMO payments.EMO is based in the USA and has been in business since 1999. EMOCorp is also a member of the BBB.


Asianpay is based in Thailand and geared towards providing online payment services in Asian countries. There are various funding options, including other payment processors (this may be a cause for concern, since some processors forbid any form of exchanges). Asianpay has been in business since June 2005.


GPT-Pal was created in September 2005, soon after Paypal began suspending various PTR accounts. Currently, only 22 PTRs use this processor, but hopefully, it will become more popular over time. The site forbids credit card chargebacks, and has a $20 fine for any such attempts.


There is currently a separate payment processor being developed by the autosurf industry. It is still uncertain when this system will become operational.


It is unfortunate that the GPT industry is sometimes painted in such bad light. PTRs and Traffic Exchanges offer a low cost alternative to promoting websites. Rather than going through traditional methods of promotion, advertisers can test the waters for their products, without having to spend big bucks. Autosurfs generate traffic as well, although many would argue that the quality of traffic is much lower than other means of advertising.


The good news, is that most of these payment processors are FREE to join. Some sites are better depending on your geographical location, while others may be better for a particular transaction profile. Be sure to do your own research before trusting any money to a payment processor.


Related links:
SBBS - Braced for Impact: Funding Alternatives
http://en.wikipedia.org/wiki/E-gold
http://en.wikipedia.org/wiki/E-Bullion
http://en.wikipedia.org/wiki/Digital_gold_currency
http://www.gold-pages.net/
http://indomitus.net/2004status.html
No BS HYIP Blog
Neteller
Guide to Payment Processors

Further Updates on Stormpay

Yet another article from the Leaf Chronicle. This time, the focus has shifted somewhat. It's not merely an investigation on 12DailyPro, but on Stormpay's handling of this fiasco.

Article published Feb 9, 2006
State agency investigating StormPay complaints
By THOMYA HOGAN
The Leaf-Chronicle

The Tennessee Division of Consumer Affairs said Wednesday it is investigating complaints involving StormPay.com, an Internet-based company in Clarksville embroiled in controversy over frozen customer accounts.

Consumer Affairs Director Mary Clement said her office has received a "large volume of complaints involving StormPay." She said once Consumer Affairs completes its investigation, law enforcement would be involved if it is determined "wrongdoing has taken place."

StormPay owner Steve Girsky said Wednesday he welcomes the Consumer Affairs investigation. He said he plans to meet today with the Better Business Bureau to go through many of the complaints filed with them.

"I think the agencies would not be doing their due diligence if they did not check us out," he said. "I invite anyone who wants to to look at this.

"We have nothing to hide."

StormPay.com, which was launched in 2002 and does business in 200 countries, serves as a payment intermediary for online auction sites and other Internet businesses, allowing customers and businesses to send and receive money.

One of its clients, LifeClicks, owns a company called 12DailyPro, which is being investigated by the FBI and officials in North Carolina and Georgia, according to a joint statement StormPay and LifeClicks released Tuesday.

12DailyPro is billed as an "auto-surf" Web agent where customers can buy online advertising and earn commissions from advertising revenue. Under the business relationship, StormPay processed third-party payments to 12DailyPro users.

An auto-surfing program is set up to generate money every time users visit a participating Web site.

The Better Business Bureau has described such programs as "thinly veiled pyramid schemes," according to a BBB statement.

Pyramid schemes, also known as Ponzi schemes, typically promise people a large return for a small investment. But the scheme only works as long as there are new investors to cover everyone else's investment. The scheme collapses when there are no new investors.

In the case of 12DailyPro, investors signed up and bought advertising space through 12DailyPro and received commissions from visits or "clicks" on their ads. The program is free to join, but members don't get commissions unless they pay to upgrade their accounts.

A portion of the earnings is funded through incoming member fees, according to the company's Web site.

The problem, Girsky said, is that many of the people complaining about StormPay have earned commissions, but the commissions are coming from new investors. StormPay has those frozen accounts to make sure longer-term investors don't pull out their initial investment and commissions — leaving new investors with nothing.

For example, "Investor A" may start out with a $1,000 investment in 12DailyPro and earn $500 in commissions. Some of those commissions may include investments from other people.

StormPay, Girsky said, has charged back — or refunded — the entire $1,500 to 12DailyPro so "Investor A" still gets back his $1,000 and the other people whose investments contributed to the $500 in commission get back their money as well.

Several complaints to The Leaf-Chronicle allege some frozen accounts at StormPay were not connected to LifeClicks or 12DailyPro.

Girsky said he could not comment on specific accounts without permission from the account holder, but he reiterated the company is working to rectify the situation.

"We're making sure we don't process any payments for any pyramid or Ponzi scheme," he said Wednesday.

Girsky also denied allegations that checks issued to StormPay customers have bounced and StormPay has canceled customer's ATM cards connected with their accounts. He said StormPay is working to make sure people can have their money invested with 12DailyPro refunded "to the extent possible."

"Every nickel in StormPay accounts is accounted for," he said.

Clement said she could not comment on specific complaints received about StormPay.

"We are now receiving complaints from consumers, and we will continue to mediate for the consumer with StormPay, but it is in the investigative stage right now," she said in an e-mail release.

Source: The Leaf Chronicle

If you like more news reports and articles published on 12DailyPro and Stormpay, do check out this link.

Meanwhile, Stormpay appears to be changing their Terms surreptitiously. Of course, nothing ever goes undetected for long. You can find references to the modification of Section 14 of Stormpay's TOS on Stormpayfraud.com as well as on DrunkOnLife.com.

Many people are wondering, how are the authorities handling the situation? Well, so far, there is no definite answer from the FBI, although numerous complaints have been filed with the BBB; a Ripoffreport.com search for '12DailyPro' 'Stormpay' and 'NetIBA' will generate a number of results, although it won't give us any more clues as to what's happening legally.


Related links:
NetMoneyBlog.com
Possible ways to support such a high percentage (theories on sustainable autosurfs)
SurfBoard Blogsite: The Stormpay Bomb (autosurfs affected and their responses)
Autosurf Industry in Turmoil
Lucre-here: Stormpay Saga
Pogue's Blog: 12DP vs Stormpay

Stormpay (Error - Site Unavailable)

Site Temporarily Unavailable

Sorry, the site you requested is currently unavailable. It will be available as soon as possible. Please try again later.

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

The general mood of Stormpay members...

Can be summed up in 2 simple videos. Enjoy! :)


Or click http://www.youtube.com/?v=-f4zK2G7X74



Or click http://www.youtube.com/?v=BDcLunbq60A


Found the link off:
http://www.pottytown.com/cartoons/sp-ceo-last-day.htm
and
http://www.pottytown.com/videos/feb06/stormscam-ceo-speaks.htm


And for those who actually want to see more dirt on Stormpay... and 12DailyPro
http://www.amayesnbuys.biz/balance.htm
12 Daily Pro Crashes and Burns

So is Autosurfing Legitimate?

That's probably the question riding on everyone's mind. Are they ponzis?

Ponzis imply that there's no actual tangible product being sold. In the case of autosurfing, it is supposedly advertising, and your time spent viewing advertisements.

I like the article posted on Sam Freedom's Internet Marketing Controversy Blog arguing about the sustainability of 12DailyPro's business model. The numbers presented represent a much more believable picture, compared to the sensationalised media arguments we've seen on ABC4. However, that doesn't mean that 12DP is infallible. For someone were to look at 12DailyPro's sales pitch (Earn 12% daily in 12 days), they would find it impossible to believe as well. 12DailyPro's model is similar to most other autosurfs, in that they pay a percentage daily for viewing a certain number of ads. Many autosurfs have come and gone, enough to raise the suspicions of the authorities and the online community.

Autosurf & Investments blog questions the legitimacy of autosurfs, but says that it really depends on how we define autosurfing. (Has legislation finally caught up with the autosurf craze?) Firstly, is autosurfing considered (online) work? In order to earn money with autosurfing, you need to surf daily. If you miss a day, you lose the potential % earnings for that day. That implies that some work is done, doesn't it? Maximum profit is earned from loyalty to the autosurf, ie surfing loyally everyday for the duration of the upgrade. The problem arises, because of the belief that advertiser earnings alone do not generate the required money to pay off the active members. That would imply that people are getting paid not from advertising earnings, but from the investments (upgrades) of new members.

Some autosurf sites claim that the money you put in isn't an investment per se. The upgrades are sometimes referred to as membership fees. So, it means you're paying for the right to surf the site, but have the opportunity to earn back your fees, by surfing and viewing advertisements.

But how much money can an autosurf generate from advertisements alone? IS that revenue enough to sustain the business? There are other income sources. With Stormpay & NetIBA, there (WAS) an opportunity for autosurfs to earn commission from referring new members to sign up under their referral link. That would count as revenue, right?


Sources and related links:
Google Blogsearch for Autosurfing
Autosurf & Investments blog
Sam Freedom's Internet Marketing Controversy Blog
Bradford Moore Autosurfing info
So, Are Autosurfs Ponzis?

StormPay Strikes Back

StormPay finally issued an official announcement on their website.

Rumors put to rest

05-Feb-2006 08:38
Recently StormPay.com closed the accounts of what appear to be some major ponzi schemes. These account closures came as the early results of investigations into those businesses by outside investigational organizations as well as our own internal investigations.

As a result, possible victims of these businesses are attempting to retaliate against StormPay.com by spreading false rumors and performing DDOS attacks against StormPay's servers. The rumors include such things as "StormPay.com has gone out of business", "Their building has been burned down", and other falsehoods. The DDOS attacks are "Denial of Service" attacks where massive amounts of traffic is sent to the website whereby disallowing legitimate web traffic to reach the website. These attacks only prevent legitimate traffic from reaching the website and pose absolutely no threat to the security of your StormPay account.

StormPay will CONTINUE to cooperate with authoritative investigations into these businesses which very heavily appear to be nothing more than illegal ponzi or pyramid schemes. Our hopes are to get these investigations completed as early as possible so that victims can quickly be refunded monies that have been captured in those account closures. However, we must warn that those who are impeding the investigation are only slowing the process for everyone involved.

StormPay Inc.

Sounds very official-like, right? Strangely enough, their previous announcement dated 31-Jan-2006 is missing from their site. Thank goodness for the miracle of blogging. I kept a copy, and so did many others. Perhaps they didn't want the authorities to see that they were openly supporting blatant ponzis (not the autosurfs, but those standardised Goldcoders HYIP ponzis).

In any case, Stormpay is not operating as a reputable company should be. Are Stormpay willing to refund the millions they made in transaction fees from these ponzi schemes? I seriously doubt that. If they want to talk about ponzi schemes, what about their NetIBA verification? Many still question the authenticity of NetIBA verification. So, if there is no actual service provided, doesn't that make NetIBA a ponzi? :) Talk about a double standard. Do as we say, not as we Do.

As far as we know, no authorities have been in contact with Stormpay and refunds are being made arbitrarily. This is not their first transgression. And it probably won't be their last.

I have never trusted Stormpay myself, as I found their business practices shady and unethical. If 12DailyPro is guilty (together with other autosurfs), then Stormpay is liable as well for letting it go on for as long as it did.


Related links:
Google BlogSearch for Stormpay
Does Stormpay owe you money?
http://9planetreviews.com/team/radiant/blog.shtml
Another news article from the Leaf Chronicle

StormPay: The Plot Thickens

Wow! It has been quite a week for autosurfs and HYIPs. Last week, a major HYIP/ponzi Profits4InvestingToo.com shut down, citing server problems. That pales in comparison to this week, in a saga involving 12DailyPro (12DP), StormPay, BYU students, and numerous autosurfs & HYIPs using StormPay.

Here's a brief recap, to spare you from reading the previous posts [1][2][3][4]. The current autosurf leader, 12DP was stuck between a rock and hard place. 12DP was trying to withdraw a substantial amount of funds in order to meet their EMO payment requirements to its members. Apparently, StormPay was refusing to release any funds, until 12DP removed EMO as a payment option. The reason given for this demand, was to reduce fraudulent credit card chargebacks.

12DP released a series of statements, to the effect that they had complied as best as they could by removing EMO, and were waiting for StormPay to release the funds. Not soon after, the accounts of various autosurfs were reportedly frozen as well. The online forums were having a field day speculating, with members sharing wild conspiracy theories and rumours.

A statement supposedly from StormPay was circulated, claimed that Stormpay had suspended the accounts of various autosurfs and HYIPs because they believed that these were ponzi schemes and and were freezing the related accounts pending an investigation.

Around the same time, a student news broadcast caught the attention of ABC4, a US local TV Network based in Utah. The broadcast publicly condemned and denounced 12DailyPro as nothing more than a ponzi scheme. The facts supporting this were largely mathematical, (although the numbers shown on the blackboard represented an idealised % that didn't factor in transaction costs, log-in difficulties, downtime, etc). In addition, a big deal was made over the company registrant address being a residence in a downtrodden location (ahem, *cough* Stormpay NetIBA *cough*).

More announcements were made by 12DP and various autosurfs/HYIPs, and access to Stormpay and NetIBA websites have been patchy the last few days, fueling rumours of a big Stormpay scam. (At the time of writing this, Stormpay and NetIBA are both back online, but questions still remain.)

There has been a lot of misinformation being spread around, including a rumour that the Stormpay building had been burnt to the ground to hide evidence. LOL. :) But, the truth is slowly coming to light.


Here's an article from a local newspaper:

Callers concerned about StormPay.com
By HEATHER DONAHOE
The Leaf-Chronicle

Numerous customers of local online money transfer service, StormPay.com, expressed concerns to The Leaf-Chronicle about being unable to process transactions through the company’s Web site during the last four days.

The company’s Web site could not be accessed and returned an error message Saturday night. Three calls to StormPay.com CEO Steve Girsky were not returned Saturday night.

Customers contacted The Leaf-Chronicle because of a story available on the Internet announcing the StormPay.com’s sponsorship at Clarksville Speedway.

The business, which is at 1690 Golf Club Lane, appears to be undergoing a massive renovation project. The building, where lights were on Saturday night, remained set up with various office machines and equipment. No one responded to knocks on the business’ door.

An employee with the construction company performing the renovations said Saturday night he spoke with a StormPay.com employee Friday but could not offer any information about the company’s status.
For more on this story, see Sunday's edition of The Leaf-Chronicle.

Originally published February 4, 2006

So, who's scamming who? Who's been spreading misinformation? I honestly can't say with 100% certainty. All the parties involved are pleading innocence (or is that ignorance?)


Then, there's ABC4's update on their news report... their previous 2 news reports can be found here and here. Obviously, the focus of the attention is on 12DailyPro, but I expect this to shift in the coming days.

Whew... another long post. I know. But, we're almost at the end.

I found a recent article for motor racing, in particular StormPay.com Weekly Racing Series.

Here's what made me laugh...

StormPay.com is a globally recognized leader in online payment processing and free online auction listings. StormPay lives up to its name with “lightning quick e-commerce.” The StormPay.com Dirt Late Model Series is also lightning quick with the action on the track.

I wonder who does their PR? (the guys who did Enron's)?

How will this story end? Either way, I'll be glad when the dust finally settles.


Other links:
http://www.fairpatton.com/
http://drunkonlife.com/Daily-Blog.html
12DailyPro Announcements tracked here
TalkGold.com Stormpay Discussion