Website Operator Agrees to Return Subscription Fees to Consumers
BALTIMORE (September 28, 2007)—Attorney General Douglas F. Gansler today announced that the state's Consumer Protection Division has reached a settlement with several Annapolis-based website operators that offered information regarding foreclosed properties. The companies, Heavy Hammer, Inc., Allhud.com, LLC, Foreclosurefile.com, LLC, Foreclosureway.com, LLC, Hudbox.com, LLC, Hudworks.com, LLC, Reozone.com, LLC, USHUD.com, LLC. (referred to collectively as "Heavy Hammer"), and Michael Urbanski, the owner of the companies, operated websites that offered consumers "free searches" of databases containing information regarding foreclosure properties "at no risk." However, the consumer was unable to obtain complete listings of properties without paying $9.95 for a three day "trial" membership that automatically renewed to a monthly membership costing up to $84.95 a month.
The Attorney General alleged that consumers were misled when they were promised free searches when, in fact, the searches were not free and Heavy Hammer did not adequately inform consumers that their trial memberships automatically renewed at a higher cost unless they cancelled their subscriptions in writing. The Division further alleged that consumers were not told in advance that their personal information provided to Heavy Hammer to purchase the trial membership, such as their contact information and information concerning their income, would be shared by Heavy Hammer with realtors and lenders.
The Attorney General also alleged Heavy Hammer and its owner made other misrepresentations, including misrepresenting that their services had been endorsed by others when the endorsing companies were owned by Heavy Hammer; that they had a relationship with the Department of Housing and Urban Development when they did not; and that they overstated the scope of the information it provided on its websites.
Under the settlement, Heavy Hammer and its owner denied the violations alleged by the Attorney General, but have agreed to stop:
-- representing any goods or services are "free" if the consumer needs to make any payment;
-- offering any memberships or subscriptions that automatically renew unless:
--- the automatic renewal is clearly and conspicuously disclosed to the consumer,
--- the consumer specifically authorizes the automatic renewal, and
--- prior to any automatic renewal, the consumer is notified of the pending renewal and the method for cancelling the membership or subscription;
-- sharing consumers' private information without the consumers' prior consent; and
-- making any misleading statements regarding their services and the endorsement of their services by others.
Heavy Hammer and its owner also agreed to make it easier for consumers to cancel their subscriptions. In addition, Heavy Hammer and its owner agreed to pay a $100,000 penalty and $50,000 for the Attorney General's costs.
Consumers eligible for refunds under the settlement will be contacted by the Consumer Protection Division.
Source: Attorney General Douglas F. Gansler