Nov. 12, 2008— -- When Classmates.com told user Anthony Michaels last Christmas Eve that his former school chums were trying to contact him, he pulled out his wallet and upgraded to the premium membership that would let him contact long-lost fifth-grade dodge-ball buddies and see if his secret crush from high school had looked him up online.
But once he'd parted with the $15, Michaels learned the shocking truth: No one he knew was trying to contact him at all. Classmates.com's come-on was a lie, and he'd been scammed.
At least that's what the San Diego resident alleges in a lawsuit filed against one of the net's original social networking sites, whose banner ads featuring unflattering yearbook pictures remain a staple around the internet. If the lawsuit, which is seeking class action status, succeeds, it could raise the minimum standards of honesty for online businesses.
"Upon logging into his Gold Membership profile in order to view the classmate contacts … Plaintiff discovered that in fact, no former classmate of his had tried to contact him or view his profile," the complaint reads. "Of those www.classmates.com users who were characterized ... as members who viewed Plaintiff's profile, none were former classmates of Plaintiff or persons familiar with or known to Plaintiff for that matter."
The putative class action suit, filed in a California state court on October 30, says there are hundreds of thousands of Anthony Michaels around the country who were similarly duped. The lawsuit asks the court to force the company to refund millions in subscription dollars and fine the company for deceptive advertising.
Lawsuits that seem funny are not always a laughing matter, according to Scott A. Kamber, a plaintiff's attorney with KamberEdelson.
"Cases that seemingly have a similar chuckle factor are rooted in a real consumer fraud that influences a consumer purchase decision," Kamber said. "Sometimes people are defrauded and misled and obviously there is a financial benefit in companies making those claims or they wouldn't do it."
Classmates.com could have a good defense, according to internet law expert Mark Rasch, if someone was actually contacting Michaels but was defrauding Clasmates.com by claiming to have gone to a certain high school.
"Or were they making statements they know to be false to induce a person to pony up the oney for a premium service to learn these statements weren't true?" Rasch asked. "A lot of this comes down to knowledge and intent on the part of Classmates.com."
Classmates.com was founded in 1995, years before Friendster, MySpace or Facebook grew popular, and is one of the net's largest advertisers, having spent $30 million in 2005, for example, on online advertising.
The company claims to have 40 million registered users, some of whom pay $15 every three months to be able to send and receive messages. The site's billing practices are complained about nearly daily on ConsumerAffairs.com.
The suit is not the first legal action accusing a prominent online company of deception. In 2003, Bonzi Software settled a class action lawsuit that alleged its banner ads (which mimicked Windows operating system warnings) were deceptive. And in January, Member Source Media agreed to pay $200,000 to settle a Federal Trade Commission complaint about the company's spam messages that promised consumers, "Congratulations. You've won an iPod video player."
While the FTC and state attorneys general have handled some deceptive advertising claims, in tight financial times the burden of online fraud fighting is increasingly falling on class-action attorneys, according to Kamber.
"Attorney General offices are seriously under budget pressure and federal enforcement in last eight last years has not been picking up the slack for the state budget issues," Kamber said. "That leaves class action attorneys on the front line of technology in the consumer area."
Neither Classmates.com nor Michaels' law firm, Kabateck, Brown and Kellner, responded to requests for comment.
Attorney Erik Sinrod, a partner at Duane Morris in San Francisco and a legal columnist at Findlaw, says that legitmate companies make a better target for lawsuits than outright scammers, like those sending fraudulent offers of long-lost Nigerian fortunes.
"Classmates.com is not some fly-by-night company -- it is a real service, not something being operated by unknown people offshore," Sinrod said. "So they are subject to U.S. law and regulators if they are conduct themselves improperly."