LEADCRITICNetQuote Wins $4.8 Million Suit from MostChoice
I would have like to have gotten this out yesterday when it was released, however my server was down again, sorry.
It was announced yesterday that MostChoice has been ordered by the court to pay NetQuote $4.8 million dollars for punitive damages relating to MostChoices acts of fraud. According the the Denver Post, MostChoice hired a person specifically to fill out NetQuotes lead inquiry forms. The person apparantly filled out 3500 forms in the months of September and October of 2006. With his work schedule of 25 to 30 hours a week he filled out about 18 forms an hour.
MostChoice not only used the inquiries to bring down the quality of NetQuotes leads, but also to steel the match data from the thank you pages and build out their own lead buyer data base.
Visiting their website you will see that MostChoice was featured in a Business Week article about click fraud. How ironic.
MostChoice attorney Ryan Isenberg issued this statement: “Mostchoice believes the verdict was based on emotion and is confident the Judge will rule as a matter of law that Netquote failed to prove its conduct caused Netquote to lose any customers. In addition, there are numerous grounds upon which Mostchoice will ask the Judge to grant a new trial, and Mostchoice will wait to see how those motions are disposed before weighing its appeal options.”
It is truly amazing how low people will in business competition and honestly it unfortunate to say that this is not the first time I have heard of these types of things happening.
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LoadCritic | Nov 12, 2008 | Reply
When will all the lead providers who did this in 2007 have the hammer fall on them?
Lead Critic | Nov 12, 2008 | Reply
Good question, probably never.
JB | Nov 12, 2008 | Reply
the only good thing with this current market is that it will weed out so many of these scammers.
If they just paid that same guy to go out and negotiate good media deals and drive traffic to a basic lead form on Most Choice, they would have generated great leads and made more money.
Why do so many companies spend so much time and energy doing scam business, when they could spend the same amount of time and effort on building a good business.
GOOD RIDDANCE!
Mike Levy | Nov 13, 2008 | Reply
Guys, this is from a Denver Post article that is being misinterpreted and has some misstatements. I have approached the reporter to make the necessary corrections. Let me cover a few things that are being confused. First, there is no judgement in this case, yet. In fact, there is a lot more than meets the eye here. What follows is a reprint of what I posted on SEOmoz.org, where we are further up the curve in this discussion.
You should know that we are suing Netquote for false advertising practices, largely relating to their claims of the size and scope of their agent network. At the end of the lead submission the agents the lead went to were sent in a return email. We counted the agents and they didn’t have the 20,000 they claimed. We called them and found out many were “ghost” agents. It was revealed in court the real number was only 6700 when we started our investigation, so our suspicions were correct. They still are. Netquote has stopped making this particular statement. This was the purpose of the submissions, agent customer count. Lead quality dilution was mathematically impossible.
We never put 3500 leads into their system at all and never in one month. We put roughly 13/day on average over a 9 month period. This accounted for only .098% of the 3.6 million leads Netquote received during that same time period. This was at the heart of why their expert witness’s testimony as to causation was struckby the court. There is no way what we did resulted in lead quality dilution.
Further, there affiliate program, incentivized lead generation programs and lead purchase deals with other lead generators, and the fact that they did not disclose to their agents that they used such marketing methods is another large part of our suit against them. In short, they generate junk leads yet they claim their leads are the same quality as the search engine generated leads that we pay a lot of money to generate. Some of their agents actually testified on our behalf that it was these programs that caused them to leave, not us. None of thir agents testified on behalf of Netquote. They brought no agent witnesses at all and their expert testimony was eliminated as to causation so in the end they had no proof of their claim.
Their own CEO, now ex-CEO, admitted their affiliate program and incentivized lead programs had become problematic and bad affilaites and incentivized lead sources had to be culled out on a regular basis. We believe that literally millions of bad leads come from these programs which is the real source of Netquotes woes. One agent even testified that he discovered Insure.com was selling Netquote bad leads and sure enough, they have a deal with Netquote. Ironically, Netquote sued us for bad leads yet they regularly pay affiliates, incentivized marketers, and other lead generators for leads that are bad as well.
Maybe if I had sold my company to them for penny’s on the dollar as they wanted, or all of my leads for cheap as they wanted, they would not have sued us. Who knows. They bought two other lead companies for cheap, but I wouldn’t cave. They buy leads from many other lead generators for cheap, but I wouldn’t join the cartel. The road to hell is paved with good intentions.
Explaining all of this to a hometown Denver jury (Netquote is in Denver,) when we were the out-of-town company from Atlanta, just didn’t work. We got Home-cooked “well-done” and what we did truly looks bad on the surface, so it was easy for them to do. Just look at all of these posts. No one ever gave us the benefit of the doubt. However, when you take the emotion out of the equation and understand all of the facts it becomes obvious this was just one competitor investigating the other. The evidence of that investigation being used in a lawsuit. Netquote’s CEO even testified that there were legitimate reasons for putting leads into another competitors system and he instructed a Netquote employee to put leads into our system as well. I believe they investigate us regularly.
Netquote seized the opportunity to make us the scapegoat of their problems and I believe is trying to force us to settle our suit against them. They are backed by a multi-million dollar venture capital fund and hired one of the country’s largest law firms to sue us and our employee, who is a good friend of mine (That was just plain mean.) By comparison, MostChoice is a small company without the financial backing that Netquote has. Standing up to this type of high-dollar legal firepower is difficult, but not impossible. They did a good job putting up their case for the jury. We focused on facts, not emotion. Netquote’s case was based in emotion and that was obvious at trial. I am confident that in the end we will get all the facts out in the open, all of the emotion out of the equation, and we will prevail. That is the way our legal system is supposed to operate.