OAKLAND, Calif. (CN) - An Internet scam formerly known as Classmates.com has been rebranded MyLife.com and continues to defraud people who respond to its spam solicitations, a class action claims in Federal Court. Victims who respond to a message that "someone is looking for you," are offered a "trial subscription" for $5, but are billed $60 or more, billed again monthly, billed again for canceling, and have their computers' address books electronically pilfered for more victims, according to the complaint.
The class claims CEO Jeffrey Tinsley, who calls himself a "serial internet entrepreneur ... has been running essentially the same spam-and-scam operations since at least 2002, when he founded the company under the name Reunion.com. The company later operated using the names Wink.com and Classmates.com, before taking on its latest alias, MyLife.com, in February 2009. False solicitations that 'someone' is looks for you have been the core of the business plan for these entities for some time."
Tinsley, of Los Angeles, and his mostly L.A.-based crew, continued the scam under a new name after settling a lawsuit against Classmates.com for $9.5 million last year, the class claims.
"In October 2008, Classmates.com was sued by customers defrauded by email messages falsely stating that individuals and or past acquaintances were trying to contact them," according to the 26-page complaint. "In February 2009, the company was re-branded as MyLife.com, which continued essentially the same business plan, and the same false solicitations that 'someone' is trying to contact you. In March 2010, the Classmates.com was settled for $9.5 million. But that was just a drop in the bucket compared to the revenue stream generated by the ongoing scam. So with a fresh new alias, Tinsley and his team of hucksters moved on to defraud a new crop of victims, including plaintiffs John Clerkin and Veronica Mendez, and millions of other similarly situated class members."
According to the complaint:
Tinsley, of the Los Angeles area, is founder, chairman and CEO of MyLife;
Rachel Glaser, of the Los Angeles area, is CFO and COO. "Ms. Glaser conspired with MyLife, Mr. Tinsley, and others to perpetrate the scam described herein, including the re-branding of the operation from Classmates.com as MyLife. Com, as well as the false solicitations, fraudulent billings, and hacking described herein;"
W. Dwight Gorall, of West Palm Beach, Fla., is "vice president of emerging business," and a co-conspirator;
Armen Avedissian, of the Los Angeles area, has worked in technical, operational and organizational aspects of the alleged conspiracy since December 2009;
Sharyn Eles, of the Los Angeles area, "has been with MyLife from day one and is the vice president of marketing operations while also overseeing general business operations. Mr. Eles conspired with MyLife, Mr. Tinsley, and others to perpetrate the scam described herein;"
The final defendant, Oak Investment Partners, is a Delaware partnership with offices in Palo Alto, Calif. "Oak Investment Partners is a venture capital firm that provided $25 million in funding to bankroll the MyLife scam, and conspired with MyLife, Mr. Tinsley, and others to perpetrate the scam described herein."
Named plaintiff John Clerkin says he signed up for MyLife's $21.95 a month membership in 2010. After realizing that no one was looking for him, he tried to cancel, and found that MyLife had charged his credit card $155.40. He demanded a refund and was reimbursed $104.55, according to the complaint.
Veronica Mendez says she agreed to take a $5 trial membership, for which MyLife charged her $60. She too "discovered shortly after signing up that no one she knew was actually searching for her." She says MyLife refused her request for a refund.
The complaint states: "MyLife.com is a scam that begins with a false solicitation telling potential victims that 'someone' is searching for them, and they can find out who by paying a small fee. If this ruse succeeds in convincing the victim to provide credit card or other payment information for a 'free trial period' or a low-price-membership (e.g. ,$7.95 per month), MyLife then overbills the victim's credit card for a much larger amount, often more than $100. In exchange for this payment, MyLife provides access to a list of fake names of people supposedly 'searching for you,' together with access to a worthless website that is of no conceivable value to anyone.
"It gets worse. Victims of the ruse then find that MyLife hacks into their address books to target their friends, family and other contacts with spam solicitations stating that 'someone' is looking for them. This starts the cycle anew by priming the pump with a fresh crop of victims that MyLife tricks with false solicitations, overbills and hacks.
"Credit card companies have fielded thousands of complaints about MyLife and its fraudulent billing practices. As a result, some, including Visa and American Express, have designated MyLife as a frequent offender whose charges are inherently suspect. If a customer calls to complain, Visa or American Express will immediately notify MyLife as a frequent offender and issue a credit for the disputed charge. To them, the name MyLife.com is synonymous with billing fraud."
MyLife claimed in November 2010 that it is registering more U.S. users per month than LinkedIn and Twitter, according to the complaint, which cites the MyLife web page's "press room." MyLife claimed it registered 2.4 million new members in October 2010, nearly one per second, and claimed to have :more than 62 million members" in January, according to the complaint.
"MyLife does not publicly report its revenues," the complaint states. "However, if MyLife scammed each one of its 62 million members out of $90 apiece, the company would have generated more than $5.5 billion in revenue."
The complaint cites more than 20 comments from alleged MyLife.com victims, from a consumer complaints message board.
One person wrote: "I'm a web developer, and when I saw their commercial, it just didn't add up. I went to the site and put in a fake name sfsf sdgfsdgf and a real age and zip code, and guess what?! 7 people were searching for sfsf sdgfsdgf!"
The class seeks damages for violation of the Consumer Legal Remedies Act, violation of the Unfair Competition Law, unlawful business practices and unjust enrichment.
The class seeks disgorgement, restitution and an injunction and damages for violations of consumer laws, unfair business practices, unfair competition and unjust enrichment.
They are represented by L. Timothy Fisher with Bursor & Fisher of Walnut Creek.