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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 (.pdf) 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 Classmates.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 Eric 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."
When Barack Obama takes the oath of office on January 20, Americans won't just get a new president; they might finally learn the full extent of George W. Bush's warrantless domestic wiretapping.
Since the New York Times first revealed in 2005 that the NSA was eavesdropping on citizen's overseas phone calls and e-mails, few additional details about the massive "Terrorist Surveillance Program" have emerged. That's because the Bush Administration has stonewalled, misled and denied documents to Congress, and subpoenaed the phone records of the investigative reporters.
Now privacy advocates are hopeful that a President Obama will be more forthcoming with information. But for the quickest and most honest account of Bush's illegal policies, they say don't look to the incoming president. Watch instead for the hidden army of would-be whistle-blowers who've been waiting for Inauguration Day to open the spigot on the truth.
"I'd bet there are a lot of career employees in the intelligence agencies who'll be glad to see Obama take the oath so they can finally speak out against all this illegal spying and get back to their real mission," says Caroline Fredrickson, the ACLU's Washington D.C. legislative director.
New Yorker investigative reporter Seymour Hersh already has a slew of sources waiting to spill the Bush administration's darkest secrets, he said in an interview last month. "You cannot believe how many people have told me to call them on January 20. [They say,] 'You wanna know about abuses and violations? Call me then.'"
So far, virtually everything we know about the NSA's warrantless surveillance has come from whistle-blowers. Telecom executives told USA Today that they had turned over billions of phone records to the government. Former AT&T employee Mark Klein provided wiring diagrams detailing an internet-spying room in a San Francisco switching facility. And one Justice Department attorney had his house raided and his children's computers seized as part of the FBI's probe into who leaked the warrantless spying to the New York Times. Attorney General Alberto Gonzales even suggested the reporters could be prosecuted under antiquated treason statutes.
If new whistle-blowers do emerge, Fredrickson hopes the additional information will spur Congress to form a new Church Committee -- the 1970s bipartisan committee that investigated and condemned the government's secret spying on peace activists, Martin Luther King, Jr., and other political figures.
But even if the anticipated flood of leaks doesn't materialize, advocates are hopeful that Obama and the Democratic Congress will eventually get around to airing out the White House closet anyway. "Obama has pledged a lot more openness," says Kurt Opsahl of the Electronic Frontier Foundation, which was the first to file a federal lawsuit over the illegal eavesdropping.
One encouraging sign for civil liberties groups is that the Center for American Progress's president John Podesta is one of the top three heading Obama's transition team, which will staff and set priorities for the new administration. The center was a tough and influential critic of the Bush administration's warrantless spying.
Among the unanswered questions:
Were there quid pro quo promises made to the phone companies and internet carriers who cooperated with the secret spying? For example, were co-conspirators promised lucrative government contracts?
Did the program appropriate the CALEA wiretapping infrastructure? Under CALEA, Congress forced telecoms to build surveillance capabilities into the phone and internet network, but promised it would only be used with court orders.
What did the first version of the surveillance program sweep into its net? In March 2004, a squadron of top officials at the Justice Department, including then-Attorney General John Ashcroft and FBI head Robert Mueller, threatened to resign over the illegality of the program. The program was subsequently scaled back, but nobody knows what the NSA was doing that was bad enough to horrify Ashcroft.
What was the legal rationale for the surveillance?FISA explicitly made warrantless domestic eavesdropping illegal, but the Justice Department's Office of Legal Counsel issued a series of memos justifying the spying anyway. The ACLU is fighting the Bush administration for access to the documents, as well as secret memos justifying torture.
"It's difficult to see how Sen. Obama could call his administration transparent if his administration continues to suppress non-sensitive information that should have been released a long time ago," says the ACLU's Jameel Jaffer.
The other looming question is whether, as president, Obama will continue the warrantless spying himself. Obama voted with the majority in Congress to legalize the Bush spying program in July, but the constitutionality of the measure is yet untested. An Obama administration is less likely than Bush to devise convoluted legal end-runs around the Constitution, according to Marc Rotenberg, the head of the Electronic Privacy Information Center.
"Keep in mind that Obama is a constitutional scholar and has a deep understanding of checks and balance," says Rotenberg. "It's hard to imagine that an Obama administration would support ... warrantless wiretapping."
With the financial markets and the economy in deep trouble, it's unlikely that Obama will quickly turn to the issue of warrantless wiretapping. But the EFF's lawsuit against AT&T over the surveillance could force the new administration to pick a side quickly. In December, a federal judge in San Francisco will hold a hearing on whether the retroactive immunity granted to AT&T and other telecoms as part of the FISA Amendments Act is Constitutional. Obama voted for the act in order to legalize the spying program, but tried unsuccessfully to strip out the immunity provision.
EFF's Opsahl hopes that if EFF prevails in December, an Obama administration might let the decision stand, clearing the way for EFF's lawsuit to proceed.
"If we are victorious in our constitutional challenge, I would hope the Obama administration would accept that loss and move on without an appeal," says Opsahl. "But we will have to see."
Katrina Spears, a self-described internet medium, was running errands Sept. 30, the day the Dow plummeted 770 points.
"When I got home that day, I had messages from 30 clients," Spears says.
While it doesn't take a psychic to see that tough times lay ahead for the economy, online practitioners of the divination arts say they're seeing a marked sift in the questions posed by their clientele, with anxious consumers increasingly asking what's in store for them financially in the months ahead. Believers who normally seek psychics for advice on a cheating spouse are now asking whether a pink slip is in their future, and internet psychics across the board saw a spike in traffic in the days following the initial market crash.
The boom in superstition is a predicable response to troubling times, says Columbia Business School professor Gita Johar, who's studied the phenomenon. "If the future is uncertain, people turn to psychics," Johar says. Consumers tend to embrace the supernatural when confronted by stress, combined with uncertainty. "You have an illusion then that you can then control the outcome. People want the illusion of control."
Spears is one of many self-described psychics, empaths and mediums who make a living giving online readings by instant message or phone on sites such as LivePerson.com and AT&T's Keen.com. Spears performs readings by online chat for $2 to $3 a minute, and says that since September she's been talking almost exclusively with Americans who are concerned about their economic futures.
"People ask if they are going to lose their house or if they are going to find a job soon, or am I going to be laid off," says Spears,
"Usually I can give some time frames, and for some people, it is clearly 'yes,'" Spears says. "I can tell them if another job is coming and a time frame for when they will get another job."
Hourly rates for online psychics typically range from $100 to $1,000 per hour, but those steep rates haven't seemed to deter the monetarily anxious from reaching out.
Another IM reader, Pure Empathy, says his business has soared since the economic downturn. He charges $2 a minute and says he gives away lots of free time.
"It's really starting to pick up," he says. "People are more depressed, and I can easily make $150 to $200 a day."
"Finances are coming up a lot more lately," he adds. "People want to know when their finances are going to get better. I tell them I don't see it happening until middle of next year we are going to have a long down period."
But not all psychics are having bullish times in a bear market.
Amaya Elliot, an intuitive and spiritual consultant who also does IM readings via Live Person, says her business has already entered its own recession: It's off 50 percent from months ago.
This time last year Elliot also known as Autumn Dancing Heart charged a higher rate and made a "fairly nice living" off four to eight sessions a day.
The drop-off is a bit unusual, though, according to Elliot who has been reading professionally since 1999. "Usually in times of crisis war and usually in economic crisis business picks up," Elliot says. "Not this time."
Elliot might take some solace in Spears' reading of the U.S. economy.
"Things will improve in March, April and May and start progressing from there," Spears says. "We are not about to go into a holy war that means everyone will have to eat rice and beans for the rest of our lives. But it is back to basics, and people won't shop as much."
Spears also says that her initial spike of new business has declined, but that her American clients remain economically worried.
"Things are back to normal," Spears says. "I have several clients in Australia and for them every day is the same as usual, but people in the U.S. are stressed about jobs and the economy."
All three say their job isn't just about making future predictions, it's also about giving good advice and listening to people's concerns.
"I answer all of my questions using my cards or gifts, but I make sure to tell them to use common sense in spending, to not quit a job that is a sure pay until another job is secured, and to make sure to use a budget and stick to it as best they can," Elliot says. "I also remind them that readings are entertainment and not a necessity, to keep in mind the things that are wants and the things that are needs."
Sometimes people ask the obvious, according to Spears.
"Sometimes a person asks what does that person feel about me," Spears says. "If he doesn't call you in four weeks, that tells you other things are on his mind, and you are not it."