CONSUMER  
ADVISORY

Internet Billing Company
iBill: Sex, Lies, and Credit Cards

   Opinion by Lawrence Kiminski
   The Oregon Herald staff reporter

Portland, Oregon, January 19, 2005

Remember Enron? Fade to black. Now think iBill, that is, Internet Billing Company, the world's largest online credit card processor, and apparently one of the largest purveyors of false promises mixed with alleged criminal theft on a massive scale.

iBill processes online credit card orders for thousands of websites around the world. These are generally small businesses that cannot generally afford to obtain their own merchant account, or businesses operating in a high risk online market, who have hired iBill to process their orders. In return iBill takes up to nearly 20 percent off the top for themselves, plus another 10 percent for reserves, for a whopping 30 percent that iBill removes from the customer. And for what? The process takes only a minute and a third of the gross sale is gone, eaten up by iBill. Okay, that leaves around 70 percent for the small business to operate. Right?

Wrong. How about ZERO percent? iBill is now taking all of the money, including that 70 percent, for a total of 100% and giving the starving client, the business which earned all of the money from their own customers, zilch, nothing. Oh, iBill promises to pay but those promises have been empty for months. iBill breaks those same promises weekly, daily, without shame and without any believable explanation. iBill's clients have no choice but to sit and wait to be evicted from their shots, or from their home in the case of the mom and pop home business, or find another processor. Unfortunately, that change can take up to four months and the prospects are dim. iBill knows this and is cashing in at the expense of the unsophisticated website business. From what we have learned, iBill has an incredible distaste for any small businesses. They take their hard earned bucks and leave them out in the cold. Yes, I know this sounds inflated, but it is not. As far as trust goes, iBill is the epitome of evil in the online processing market.

iBill was told early in 2004 by First Data (the company which controls iBill's account) that iBill's merchant with First Data would soon be terminated and that they, iBill, should make plans to find another relationship with another bank. iBill ignored the warning from First Data until it was too late. iBill lied to their customers about what had happened and ended up with little or no money to pay their website businesses (webmasters), mostly small businesses where their online sales account for 100 percent of their income which is no zero. iBill is forcing an incredible number of businesses into financial ruin and bankruptcy.

iBill is not paying clients, and they are now under investigation by the US Justice Department. iBill has always refused to take responsibility. However, there is overwhelming evidence to the contrary. An Appellate Court has, in essence, indicated the problem was iBill's alone. There is really no doubt that iBill is the guilty party here, responsible for thousands of their clients going unpaid, lying to them, secretly planning to coax these same clients to hand over more of their money but with no plan but promises to replay them. There's a word for this. THEFT. Felony theft. If iBill is not stopped, they will undoubtedly continue to lie and steal from their customers, from their clients, and from their stock investors. But the equally important problem is that iBill refused to communicate with their client in any meaningful manner. That problem also continues.

Initially respected, iBill has become one of the most reviled, despised, mistrusted, and suspicious companies on the Internet, with business practices reminiscent of Nazi Germany.

When we first got wind of this story, we were rather hesitant; it seemed just another company with big financial problems. Once our investigation went deeper we found a company totally incapable of being honest, decent, or with any intent to communicate with their clients except on a distant, dismissive level. iBill hides their problems in a deceptive online pretense of communication. They offer only childish statements to their client website businesses. Current and previous examples demonstrate that iBill has absolutely no intention of keeping promises to their clients, the little mom and pop businesses who so desperately need to be paid for the money they have earned.

In today's world of the fast buck, smiles and promises come easily. A forced, painted smile works for a while, even with the largest business. But ultimately that kind of obsolete strategy fails because the customer looks elsewhere. At iBill there was hope. There was promise. But the seed began to rot within. The company forgot what was important. They got greedy. They became lazy, full of themselves. And they began to pretend they were treating the customer decently because they had all those corporate slogans to paste on their website. But ultimately successful slogans need heart, and honesty. Or they should. We'd like to say that iBill's way of dealing with customers, their lack of sincerity or empathy, is rarely successful. But we'd be wrong. Look around. The United States is filled with greed, populated by companies who fail because of greed. They ignore their clients by way of a veil of secrecy, dismissal, and indifference. At iBill, it seems the idea is to hide from the people for whom they have not paid millions of dollars. Is it possible that iBill may not even realize the truth? Are they incapable of seeing it as though they are flatlanders in a corporate cartoon world? Corporations like iBill become isolated in their own sense of what they paint as truth, yes. But there is no doubt in my mind that iBill knows what they are doing and doing so illegally, heartlessly, and without any concern for their clients and customers.

So, is this just big business as usual, the American Way? Is the only important factor the survival of the corporate entity? What about the human factor? Where are we headed as a nation? Where are our values? Apparently, iBill's strategy is to ignore their clients and cut the strings by which the client can contact them, take the money and run. Perhaps iBill believes the client will just fade away in ruin, desperate little people who don't matter.

Well, the client is just the fiber of this country, that's all! It is time for a publication to take a chance, go all the way, and expose the nasty culprits for what they are. So, let's state this for the record:

IBill was recently acquired by Penthouse International who later dropped them reportedly because of quality disagreements of iBill’s former CIO, David Hackney, and even former CEO John Perry who still remains reluctant to discuss the major problems at iBill, apparently from fear of being handed a subpoena to testify in either a civil or criminal case. The list of possible iBill turncoats includes Todd Moran and Mark Smith, the later former head of sales for iBill. There are so many former officers one wonders how many hours it takes for the new arrivals to come up to speed. iBill senior vice president for marketing Cathy Beardsley may have been bumped up to President of the Company. More later on this. But others who have either left iBill, are in hiding, or who have been misplaced include:

Andrea Ebanks
Bert Metcalf
Crystal Corbie
Dave Kulkowski
Dave Welborn
Enrique Cosme
Garrett Bender
Henry Borja
Joe Delekto
Kevin Oppenheimer
Luis Ziegenhirt
Petrus van Staden
Scott Barry
Todd Moran

The list is perhaps seven or eight times larger. More on this later.

Thousands of clients are reportedly in the process of organizing a class action law suit against Internet Billing Company and their associates which could eventually make iBill stock worthless, or forcing them into chapter 11. It seems apparent that iBill has no intention of paying many or possibly any of their website businesses who so heavily need the money they earned.

How much do iBill stockholders understand about these problems? What about Law Enforcement? We have several inside sources at iBill. There's no money exchanged for the information given to us by these sources. There is additional information, a growing network of evidence to support the sources.

The problems at iBill are so intense, so paramount that the corporate structure is crumbling. But the corporate website located at http://www.ibill.com, displays what appears to be a calm and professional demeanor with no mention of pending doom. Even inside the high walls of corporate iBill, where website clients gain access to their “CMI” accounts, the iBill NEWS continues to assert that all is okay or repeatedly promising payment, time and again, over and over, ad nauseum, ad infinitum.

Officers of the Internet Billing Company are making bets on which client will pull out next, away from iBill. If iBill manages to hold off what seems to be the inevitable, the net result will be a downgraded company which has lost nearly all respect in the credit card processing business. Financial interest in the company will certainly dwindle, shareholders are certain to get the drift and terminate corporate officers.

We use to have faith in large corporations, that, in the long run, it would all make sense, that these business people could not possibly be that bad, be so insensitive, corrupt, with such a disregard for anyone but themselves. Right? But messages from iBill to their clients (webmasters) have included the same empty promises of pending payments from unpaid accounts. Our sources tell us the problems originate directly from the president of the company and other corporate officers. There appears to be blatant mismanagement, on a massive scale, which is sure to land some of the corporate officers in debt, or worse, prison if what we have been told is true. The information on iBill's news website located at http://www.ibill.com/about/ is hopelessly out of date. This is just about laughable. The strategy seems to be familiar if not juvenile; OUT OF SITE, OUT OF MIND.

From what we can tell, the problem was not First Data as iBill would claim. They gave iBill enough warning that they would not renew iBill's merchant account. But the problem with iBill goes all the way to the top, meanders like a dirty little snake to corporate officers like Greg May, Vice President in charge of iBill Sales. We have evidence suggesting Greg May has allegedly yet purposely given false information to clients in the hope of getting a few more dollars from his clients before they are forced to accept the inevitable: iBill will not pay their clients. We have copies of memos which highlight some rather nasty directions to lower staff.

Webmasters who call iBill, demanding payment and to simply talk to someone, are ignored by anyone at iBill who has any knowledge of what’s going on. Instead, the webmasters are sent to the same voice mail, or to Client Services. On behalf of one of our sources and with full knowledge of the what we were doing (the client was with us), we called iBill 32 separate times, insisting to speak with someone in the president’s office, or some officers, or someone who knew something. The client had not been paid. Their bank account was overdrawn because of iBill. Their very livelihood, their world was in jeopardy because iBill had not paid them for a long period. Each time we were sent to Client Services which means someone who has no information. On the way to Client Services, we were informed by a recording that Client Services would have no further information about payments not made to webmasters (website businesses). We were told to read the information in the CMI page. Unfortunately, there was no extra information on that page and the information which had been there earlier was wrong. Without any doubt, iBill was hiding from their creditors, refusing to talk to anyone about it. This is one of the most despicable acts any company can commit' first they steal your money, then they refuse to talk to you about it.

At Client Services, after insisting repeatedly that we needed more information, the poor employee, obviously reading from a prepared script, put us on hold and returned with a statement that the billing department had said that a check or wire transfer was on the way. Fine. What is the federal reference number? He had no idea. But we were told that the billing department would send an email to the customer within two hours which would include the CHIPS number.

It did not arrive. It never came. Nothing. More dead promises. More lies. We called the same Client Services rep and all he had to say was, “I’m sorry, but they have gone home for the day.” (The next day we called for the same information but the same Client Services rep told us that apparently he was wrong and, obviously embarrassed, apologized. But true to his training, he said iBill had made yet another promise that that the money would be sent next week.)

On their website, iBill had yet again updated the date to pay their clients. Note that this was now the fourth date change! That means iBill had made three separate promises and failed each time to make payment. We called again. The receptionist refused to answer. During the middle of the day, their time, iBill turned off their switchboard and refused to answer any incoming calls! The continued for the rest of the day.

That week came and went, and yet more promises were made, not for payment this time, but that perhaps there may be more information soon. That same tune has been played over and over at iBill. It is laughable. There was no apology, just the blatant arrogance by Internet Billing Company

Our investigation shows that this example is not an isolated case. There are literally thousands of clients to which iBill has lied. The problem is not just financial. The problem is misrepresentation, malfeasance, negligence, and criminal acts. We make these statements with the full intention of backing them up in a court of law.

The problem is so intense that Internet Billing Company stock could move downward quickly. However, that is not our intention. Our desire is to help Webmasters find a solution with iBill, perhaps help iBill to communicate with the Webmaster instead of leaving them hanging or posting some useless statement on their website. There is no one at iBill willing to talk to the website business manager, give them the truth. Let's be clear about this. iBill is lying to their clients. iBill is ignoring their clients.

We asked First Data about the problem. Here is their reply:

iBill processes online website orders. First Data is a billion dollar company that gave notice earlier last year that we would not extend iBill’s merchant agreement. It seems that iBill sought court intervention to require us to continue processing after the expiration of iBill's agreement, in lake September 2004. The court denied iBill's request for a preliminary injunction against First Data. First Data has not processed payments for iBill since that date.

First Data did exercise its rights to increase its security by the amount of transactions processed by iBill between September 16 and September 22, 2004. In doing so, First Data acted in accordance with its rights under its agreement with iBill and all applicable law. To the extent that any funds remain after resolution of iBill’s obligations to First Data, those funds will be released. Given the contingent nature of these obligations, however, the timing and amount (if any) of such release will depend upon iBill’s compliance with contractual requirements and Master Card and Visa rules and regulations.

We gave iBill a chance to reply, to correct the problem or communicate. We even sent a letter to their president and to their legal department. They have not denied these charges, and they have made no attempt to defend themselves or offer excuses which quickly changed the next day. It seems the corporate officers running iBill understand what they have done but they are too ashamed to speak.

We urge appropriate law enforcement authorities to look into possible charges against Internet Billing Company for theft, gross incompetence, fraud, conspiracy to commit fraud, overcharging clients and possible Antitrust violations.

Of course, there is much more to this story which needs to unfold. We intend to follow and report it. In the meantime, we urge everyone to avoid Internet Billing Company. As difficult as it may seem, this problem will only get worse.

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