Ripoff Report

Ripoff Report

Type of site	Consumer
Available in	English
Created by	Ed Magedson
URL	http://www.ripoffreport.com/

Ripoff Report is a privately owned and operated for-profit website founded by self-professed consumer advocate Ed Magedson. The Ripoff Report has been online since December 1998 and is operated by Xcentric Ventures, LLC which is based in Tempe, Arizona.

Reports and rebuttals

The Ripoff Report allows users over the age of 14 to post free, un-moderated and uncorroborated complaints known as 'reports' which contain details of the user's experience with the company or individual listed in the report. The site requires users to create an account which includes an unconfirmed email address before reports can be submitted. According to the site's Terms of Service, users are required to affirm that their reports are truthful and accurate, but the site admits that it neither investigates, confirms or corroborates the accuracy of submissions. Ripoff Report has more than 1 million pages indexed on Google.

Companies who have been named in a report may choose to respond by submitting a 'rebuttal' which explains their side of the story. There is no charge to submit a rebuttal, but users must first register for an account.

Posting a rebuttal results in the complaint achieving a higher position in Google search results. The reports are configured to display the complaint in the search result summary, and not the rebuttal. According to the website, Ripoff Report may limit the number of rebuttals filed per-report and may decline to publish, or censor, rebuttals in certain cases.

By creating a user account, a user agrees to exclusive venue in Arizona for any legal dispute arising out of the posting submitted by the user. In June 2013, a federal court in Maryland found that that this agreement did not prevent a user from suing the author of a report and Ripoff Report in Maryland, because the user agreement applied only to the rebuttal, not the report.

In May 2013, a Forbes Magazine article presented in detail Ripoff Report's description about how the site operates its business based on interviews with Ed Magedson and other employees.

"Non-removal" policy and exceptions

The Ripoff Report website claims that its stated policy is to refuse to remove reports. Ripoff Report states that it does not allow authors to remove their own reports, even in cases where a mistake has been made. Furthermore, the site states it will generally not remove reports in response to legal demands from attorneys. However, a court has noted that Ripoff Report has made exceptions to this general policy.

This stated policy is disclosed to users in the site's Terms of Service. While Ripoff Report claims not to "remove" reports, Ripoff Report advertises that it will remove (redact) specific information or add positive content to reports for participants in its paid programs, the Corporate Advocacy and Remediation Program and the VIP Arbitration Program. The site represents that all complaints remain public and unedited, with the exception of redactions for prevailing participants in the VIP Arbitration Program. A longer discussion of the policy is found on the site's Frequently Asked Questions page. In May 2013, Ripoff Report started offering a new service called "RipoffReport Verified" that allows paying members 14 days to resolve complaints before they are posted, for $89.95 a month.

This stated non-removal policy was the subject of a 2007 lawsuit against the Ripoff Report which involved an author's request to remove several reports he submitted in which he referred to a Canadian company as a "scam." In a published federal ruling, the court found that Ripoff Report was not required to remove reports in this context.

Plaintiffs have also attempted to force Ripoff Report to remove reports by suing the author and obtaining an injunction requiring the removal of the offending content. In one recent case, Blockowicz v. Williams, 675 F.Supp.2d 912 (N.D.Ill. 2009), a federal district court in Chicago found that Ripoff Report was not required to comply with such an injunction because it had not been named a defendant in the original lawsuit. Some observers have stated this outcome was legally correct but morally troubling. The plaintiffs in the Blockowicz case appealed the district court's refusal to enforce their injunction against Ripoff Report. On December 27, 2010, the Seventh Circuit Court of Appeals issued an opinion, which affirmed the lower court's decision and agreed that Ripoff Report was not required to comply with the lower court's injunction because it had not been named as a defendant and was for that reason not bound by the injunction under Federal Rule 65(d)(2)(C). Because Ripoff Report had claimed in Blockowicz that it would not be bound by an injunction if it was not named as a defendant, a later court found that a derivative defamation claim against Ripoff Report for the purpose of enforcing an order against the author was not lacking in probable cause.

One day after the Seventh Circuit's ruling in Blockowicz, a Florida state court held that the law allowed it to issue an injunction requiring Ripoff Report to remove a complaint posted by a third party. The plaintiff filed an appeal asking the Third District Court of Appeal in Florida to hold that Ripoff Report could be ordered to remove reports. On December 28, 2011, the Court of Appeal issued an opinion, which called Ripoff Report's business practices of "prid[ing] itself on having created a forum for defamation" "appalling", but the court agreed that the Communications Decency Act did not allow injunctive relief requiring the site to remove reports: "However much as this Court may disapprove of business practices like those embraced by Xcentric, the law on this issue is clear. Xcentric enjoys complete immunity from any action brought against it as a result of the postings of third party users of its website."

Despite its claimed history of refusing to remove complaints, in July 2010, Ripoff Report announced a new program called "VIP Arbitration" which has the stated purpose of offering victims of false reports a new way to clear their names. According to the site, the arbitration program involves private, third party arbitrators who are paid to review disputed reports and render decisions about their accuracy. Although Ripoff Report claims to refuse to remove reports, the site now explains: "Any statements of fact that the arbitrator determines to be false will be redacted from the original report." The site has also posted an updated FAQ page with an additional discussion of the arbitration program. The page includes links to examples of how reports look after being submitted to the program. The current cost of the program is $2,000. http://www.ripoffreport.com/Arbitration.aspx

Litigation involving the Communications Decency Act

According to a United States law called the Communications Decency Act, 47 U.S.C. § 230(c), websites like the Ripoff Report are excluded from certain forms of civil liability seeking to treat the site as the "publisher or speaker" of user-generated content. For certain claims, the exclusion from liability applies for material contributed by third parties that is false, and even if the site does not take any steps to investigate content prior to publication or remove content after receiving notice that the material is false. Protection also extends to editorial changes made by the website operator itself, as long as such editing does not alter the meaning of the original third-party content.

Lawsuits have been filed against the Ripoff Report based on theories that the site is not excluded from liability for certain causes of action by reason of Section 230 of the Communications Decency Act, either because certain activities of Ripoff Report render the site itself an "information content provider" (and thus cause it to lose the exclusion from liability under Section 230 of the Communications Decency Act (e.g., its alleged solicitation of defamatory content, its purported refusal to remove content which is false, and its alleged alteration and/or modification of reports or their titles) or because certain claims (e.g., extortion) would not be excluded from liability under Section 230 of the Communications Decency Act. For a variety of reasons, none of these cases have ever reached trial.

In one case from 2004, a federal court in Texas. held that Ripoff Report would not be excluded from liability for certain claims by reason of Section 230 of the Communications Decency Act. This part of the ruling was based on allegations by the plaintiff that Ripoff Report itself created defamatory material, as opposed to simply hosting material created by a third party. Based on these allegations, the court determined that CDA immunity would not apply because, "Contrary to the defendants' arguments, MCW is not seeking to hold the defendants liable for merely publishing information provided by a third party. Rather, MCW is seeking relief because the defendants themselves create, develop, and post original, defamatory information concerning [the plaintiff]." MCW, 2004 WL 833595, *9. The MCW case never reached trial because, after finding that the plaintiff's allegations were sufficient to overcome the exclusion from liability under Section 230 of the Communications Decency Act, the court found that it lacked jurisdiction and the case was dismissed on that basis. According to a summary of the case from the Citizen Media Law Project, the plaintiff, MCW', appealed the ruling, but later voluntarily dismissed its appeal."

It has been speculated that Ripoff Report has actively sought to present an undefeated litigation record by entering into confidential settlement of cases in which it had a motion to dismiss on the grounds of CDA immunity denied.

Some cases involving the Ripoff Report include the following:

• Asia Economic Institute, LLC v. Xcentric Ventures, LLC (May 4, 2011) (summary judgment granted in favor of Ripoff Report due, in part, to CDA immunity);

• Herman & Russo, P.C. v. Xcentric Ventures, LLC, (Feb. 14, 2011) (summary judgment granted in favor of Ripoff Report due to CDA immunity);

• Intellect Art Multimedia, Inc. v. Milewski, (N.Y.Sup. Sept. 11, 2009) (claims against Ripoff Report dismissed for failure to state a claim due to CDA immunity);

• GW Equity, LLC v. Xcentric Ventures, LLC, (N.D.Tex. 2009) summary judgment entered in favor of Ripoff Report based on CDA immunity);

• Global Royalties, Ltd. v. Xcentric Ventures, LLC, (D.Ariz. 2008) (claims against Ripoff Report dismissed pursuant to Fed. R. Civ. P. 12(b) (6) without leave to amend based on CDA immunity);

• Whitney Info. Network, Inc. v. Xcentric Ventures, LLC, 2008 U.S. Dist. LEXIS 11632 (M.D.Fla. Feb. 15, 2008) (summary judgment entered in favor of Ripoff Report based on CDA immunity).

But also see:

• MCW, Inc. v. Badbusinessbureau.com LLC, 2004 WL 833595 (N.D.Tex. 2004)(Texas federal court denied motion to dismiss under Section 230 of CDA due to allegations that Ripoff Report provided some content)

• Hy Cite Corp. v. Badbusinessbureau.com, 418 F. Supp. 2d 1142 (D. Ariz. 2005) (Arizona federal court denied a motion to dismiss an extortion claim against Ripoff Report under Section 230 of CDA).

Other legal actions

Many companies and individuals have sued Ripoff Report. Ripoff Report has also sued many commentators that have been critical of it. Some previous suits can be reviewed at Citizen Media Law Project.

A partial list of cases against Ripoff Report includes the following:

• A lawsuit was filed against Ripoff Report in New York in January 2010 seeking $11 million in damages. The complaint also asserts claims against Magedson and against Google. As of December 2011, the case remains ongoing.

• Seldon v. Magedson, filed against Ed Magedson and Ripoff Report in New York in September 2011 seeking $25 million in damages. This case was dismissed for lack of jurisdiction. In January 2013, the plaintiff refiled the case in Arizona.

• On March 12, 2010, Antoine v. Xcentric Ventures LLC was filed against Ripoff Report in New Jersey. The complaint included claims for RICO predicated on extortion and sought damages of $33,333,333.00. The case was subsequently dismissed by the court in August 2011. The complaint was dismissed for failure to effectuate personal service of the defendants.

• George S. May International v. Xcentric Ventures, LLC (N.D. Ill. filed Sept. 15, 2004),. The parties settled the case shortly after the United States magistrate judge recommended contempt sanctions and with a motion for summary judgment pending.

Several people and businesses listed on Ripoff Report have allegedly hired the Defamation Action League, an organization run by William L. "Bill" Stanley (possibly a pseudonym), who is listed as one of the world's top 200 spammers, to attempt to make Magedson and his business partners remove specific reports. In return, Magedson filed a lawsuit under the Racketeer Influenced and Corrupt Organizations Act (RICO). On June 21, 2007 a preliminary injunction was granted against DefamationAction.com and ComplaintRemover.com. Stanley and his associates were found liable for defamation and making death threats. Robert Russo, who claims not to be part of the Stanley group—but who does own ComplaintRemover.com, filed an answer, defenses and a counter-suit in the case. The parties reached a settlement on May 15, 2009.

in July 2003 a default judgment was entered against Ripoff Report in the Eastern Caribbean Supreme Court High Court of Justice for EC$27,100,932.00. The award, made in Eastern Caribbean currency rather than U.S. dollars, has not been recognized or enforced by any U.S. Court. With the recent passage of the SPEECH Act which prohibits U.S. courts from recognizing foreign judgments if they conflict with U.S. law, it is unlikely that any foreign judgments against Ripoff Report would be enforceable in the United States.

Ripoff Report itself has sued those who have published negative commentary about it on typical SLAPP-type claims such as defamation, although Ripoff Report presents itself as a proponent of free speech and opponent of SLAPP litigation. Some of these cases are:

• In Xcentric Ventures v. Village Voice Media, CV 2008-02416 (Ariz. Superior Ct. complaint filed Jan. 31, 2008), Ripoff Report sued the publisher of the "Phoenix New Times", a reporter who wrote an article on Ripoff Report, and the reporter's source for defamation.

• In Xcentric Ventures LLC v. Bird, Ripoff Report sued a blogger and the blogger's employer for defamation based on alleged implications in the blog post. The case was dismissed for lack of personal jurisdiction and later settled with an appeal pending.

• In Xcentric Ventures LL v. Richeson, Ripoff Report and its law firm as plaintiff sued the publisher of a website that contained postings critical of Ripoff Report and its lawyers for defamation and other torts in United States District Court in Arizona. Ripoff Report unsuccessfully sought a preliminary injunction, which the court denied as an unconstitutional prior restraint on free speech. The case was subsequently dismissed by stipulation.

In July 2013 the Government of India ordered a block on accessing the site although no explanation was forthcoming as to why it had been blocked. As of August 7, 2013, the block has been removed.

Corporate advocacy program and extortion claims

Ripoff Report has received some criticism of its "Corporate Advocacy, Business Remediation & Customer Satisfaction Program," particularly whether Ripoff Report sufficiently discloses all facts that would influence the public's perception of the program. Characterizations of the program differ from the viewpoint of courts, non-profit advocacy groups, and Ripoff Report itself.

Ripoff Report provides its own description of the operation of the program in detail on the Ripoff Report website's Corporate Advocacy Program page. The page advertises with an illustration of how the Google search results will be altered for members who join the program.

In 2010, a federal court found that the program requires companies to pay a fee to Ripoff Report starting at $7,500 plus a monthly fee in exchange for which the site claims it will act as an intermediary between the company and any unhappy customers who have posted complaints on the Ripoff Report site. The rate sheet for the Corporate Advocacy Program was filed as a public document in July 2010. Ripoff Report advertises that companies who join the program must agree to meet certain conditions including a promise to make refunds when requested. Members of the program must also agree "to never sue a customer for filing a Rip-off Report," but Ripoff Report states that helping members "go after" employees posing as a consumer will be "our pleasure." In an amicus brief, Public Citizen noted that there is a "serious conflict of interest" that could lead to skepticism that Ripoff Report conducts a dispassionate review of those who are paying to be investigated, that there has never been any known neutral audit to verify Ripoff Report's characterization of the program, and that consumers must take these concerns in to consideration in assessing Ripoff Report's bona fides.

While Ripoff Report claims that existing reports are not removed, Ripoff Report's editor, Ed Magedson, will update the titles of reports to represent that the company has joined the program and has made a commitment to increasing customer satisfaction. A federal court described that the effect of these titles is that Corporate Advocacy Program members receive "preferential treatment" including that negative reports about Corporate Advocacy Program members are less prominent in internet searches. Public Citizen described that this preferential treatment is accomplished through use of meta tags in a July 2011 amicus brief:

if Xcentric’s management determines that the business is committed to rectifying any problems, Xcentric will not remove the critical statements but it will bury the criticism in boilerplate praise. The boilerplate praise is also inserted into the description meta tags for each page about the business so that a Google search will show the praise rather than any criticism about its search results.

The Court of Appeal in Florida described the Corporate Advocacy Program as a "service" in a December 2011 opinion as follows:

"Xcentric describes a 'service' it provides to people and entities who wish to challenge false postings on Xcentric's website. This 'service' is called the 'Corporate Advocacy Program' by Xcentric. Individuals or businesses who believe they have been defamed by a posting on Xcentric's website must, according to the amicus brief filed in this case, 'pay a tidy sum to be investigated by Xcentric's management.' Moreover, '[i]n addition to a steep upfront charge, the business is required to make periodic payments to keep its status in the program.'"

In February 2007 The Phoenix New Times reported that at least 30 companies at that time paid Ripoff Report for participation in the Corporate Advocacy Program.

Several companies have sued Ripoff Report based on claims that the Corporate Advocacy Program is unlawful. None of these claims has ever gone to trial. In December 2005, in Hy Cite Corp, a Arizona federal court denied a motion to dismiss an extortion claim against Ripoff Report. On July 19, 2010, a federal court in Los Angeles, California entered an order granting partial summary judgment in favor of Ripoff Report in a case which alleged that the Corporate Advocacy Program violated federal racketeering laws based on attempted extortion. The court's order stated that the plaintiffs failed to show that the Corporate Advocacy Program was attempted extortion under California law because, "The offer to help Plaintiffs restore their reputation and facilitate resolution with the complainants in exchange for a fee does not constitute a threat under California Penal Code § 519." Based on that determination, the court granted summary judgment in favor of Ripoff Report as to the plaintiffs' racketeering claim predicated on attempted extortion.

In October 2011, a federal court in California reached a similar conclusion in a lawsuit against another consumer complaint/review site - Yelp. In that case, the plaintiffs accused Yelp, Inc. of committing extortion by charging money to remove negative reviews. In a 15-page ruling, the federal court held that these allegations were barred by the Communications Decency Act. But the court also noted that Yelp's marketing representations might not be excluded from liability under Section 230(c)(1) of the Communications Decentcy Act.

"SLAPP-back" lawsuits

Ripoff Report's legal FAQ page contains a warning to anyone who might be considering suing the site: "any suit filed against us without probable cause may subject the complaining party and/or their attorneys to liability in the State of Arizona for wrongful use of civil proceedings. We don't mean to sound harsh, but if you knowingly file a frivolous lawsuit against us, regardless of where your case is filed, you and/or your lawyers can be subject to a lawsuit in Arizona in which a jury could, if appropriate, award both substantial compensatory and punitive damages against you." This threat warns would-be plaintiffs that if they bring a lawsuit against the Ripoff Report and lose, Ripoff Report may respond by filing a new lawsuit against the unsuccessful plaintiff (and possibly their attorneys) for malicious prosecution. This type of action is commonly referred to as a "SLAPP-back lawsuit" which derives its name from the acronym Strategic Lawsuit Against Public Participation or "SLAPP." Ripoff Report does not disclose how many SLAPP-back lawsuits it has brought.

Ripoff Report unsuccessfully filed one such action on July 18, 2011 in federal court in Arizona against the parties and their attorneys in Asia Economic Institute LLC v. Xcentric Ventures, LLC, which was brought in California. The California case had been resolved in favor of Ripoff Report. However, in the Arizona case, the United States District Court held that the California case was not lacking in probable cause, because the plaintiffs' RICO claims predicated on attempted extortion were based on Ripoff Report's Corporate Advocacy Program itself, the descriptions of the Corporate Advocacy Program on Ripoff Report's website, and emails from Ed Magedson. On November 8, 2012, the federal court in Arizona dismissed Ripoff Report's claims against the attorney. Ripoff Report subsequently requested permission to file an amended complaint with more details about its claims against the lawyer. However, Ripoff Report's request was denied, and its subsequent motion to amend was called "unreasonable and vexatious in light of the Court’s prior orders." On June 17, 2013, the United States District Court in the Arizona case granted summary judgment to the remaining defendants. The case was dismissed and the lawsuit was terminated.

On June 19, 2013, Xcentric filed a Notice of Appeal to the Ninth Circuit Court of Appeals. The appeal is pending.

Lawsuits against competing sites

In addition to defending itself from lawsuits, on several occasions Ripoff Report has also acted as a plaintiff and has sued competitors who were accused of stealing content from Ripoff Report in an effort to increase their own popularity by expanding the amount of material on their competing sites.

On May 26, 2011, Ripoff Report filed a lawsuit in federal court in Arizona against the operator of a competing website located at www.scaminformer.com. The lawsuit against ScamInformer seeks copyright infringement damages of "not less than $63,000,000", plus injunctive and other relief.

On May 10, 2011, Ripoff Report filed a similar action for copyright infringement relating to a "copycat" website located at www.reportaripoff.co.

In December 2008, Ripoff Report filed a complaint in federal court in Arizona against a competitor, ComplaintsBoard.com, accusing it of violating U.S. copyright law by stealing "large quantities of copyrighted works from the Rip-off Report site without … permission or consent." The lawsuit further alleged that ComplaintsBoard violated U.S. trademark law by using Ripoff Report's name and trademarks to "mislead consumers" resulting in "substantial actual confusion among consumers" as to the relationship between the two websites.

ComplaintsBoard failed to respond to the lawsuit and in October 2009, a default judgment was entered in favor of Ripoff Report which awarded damages, attorney's fees, and costs of more than $60,000.00. The judgment also included a permanent injunction prohibiting ComplaintsBoard from using Ripoff Report's name or content in the future. Ripoff Report was later awarded attorney's fees and other costs against ComplaintsBoard.

Domain name disputes

Ripoff Report has occasionally taken action to shut down imposter sites by using ICANN's Uniform Domain Name Dispute Resolution Policy or UDRP. Such actions have included the following:

• Xcentric Ventures, LLC v. Domain Privacy LTD, (domain name <rippoffreport.com> ordered transferred to Ripoff Report)

• Xcentric Ventures, LLC v. WhoisGuard, (domain name <thebadbusinessbureau.com> ordered transferred to Ripoff Report)

• Xcentric Ventures, LLC v. Mark Johnson, (domain name <rip0ffrep0rt.com> ordered transferred to Ripoff Report)

• Xcentric Ventures, LLC v. YDS Web Solution, (domain names <ripoff-reporters.com>, <ripoff-reporter.com>, <ripoff-reporters.net>, <ripoff-reporter.net>, <ripoff-reporters.org>, <ripoff-reporter.org>, <ripoff-reporter.info> ordered transferred to Ripoff Report)

• Xcentric Ventures, LLC v. Report A Rip Off, Inc, (domain name <reportaripoff.net> ordered transferred to Ripoff Report)

External links

• Sullivan, Bob (2006). "Scam-fighting Web Sites". MSNBC.com. {{cite journal}}: Unknown parameter |month= ignored (help)
• Roberts, Michael (2012). "Why RipOffReport.com & Negative Results Appear on Page 1 of Google". youtube.com. {{cite journal}}: Unknown parameter |month= ignored (help)