February 10, 2009
FTC Finally Shuts Down Qchex.com
The FTC has finally shut down Qchex.com for unfair business practices. The case had started in 2006. Qchex basically allowed its users to create checks and draw on accounts without any verification whatsoever. The site was a magnet for fraudulent activity and the Court found that substantial fraud against consumers did occur.
Qchex argued that they didn't commit fraud, it was their users. The Court didn't buy this at all, noting that without any verification standards in place the fraud could not have taken place. The penalty imposed included a fine of over half a million dollars. This was all of Qchex profits in the last year.
The press release from the FTC is here, and there are links to the Court's opinion from the same page. The arguments raised by defendant are some of the most specious theories one can present in court with a straight face, if that. The Court disagreed with all of them.
February 10, 2009 | Permalink
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