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Adteractive Goes Under, No One Will Be Paid

Once one of the top “email submit” and freebie companies in the world, boasting a reported tens of millions of dollars a month, has announced that they will be closing their doors. Adteractive, which was behind many of the freebie offers that were often called “email” or “zip submits” sent a letter to all networks announcing that they would not be paid on owed money, and not to expect to be paid anytime in the near future.

Adteractive was once billed as one of the top Performance Marketing agencies, since 2000, and its founders were known to live an opulent lifestyle, buying huge houses, driving expensive cars and throwing famous parties. However, in 2007 they lost a lawsuit with the FTC that alleged that the freebie, “email submit” offers were extremely fraudulent and used deceptive methods to promote them.

The failure of Adteractive is expected to significantly affect more than a few CPA Networks that have depended not only on the ongoing income from their offers, but are owed money from the company.  According to a letter sent, the networks and affiliates are not going to be paid ever.

Letter is below

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Pesach Lattin

Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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23 Comments

    1. “one of the biggest email submit and freebie companies in the world?” Adteractive was out of that game 6 years ago.

  1. It’s a shame that so many companies are falling. The FTC/FCC doesn’t understand “Online Marketing”, if they don’t understand it, they automatically assume it’s bad. A friend of mine bought a computer about a year or two ago, a HP desktop pc, he had to fill out a “hard copy” survey, on a clipboard, not online or anything, just asking if the service was what he wanted, if he was satisfied etc. He then had to sign the paper to verify that it was him. Kind of sounds like a double-opt-in email doesn’t it? Funny thing is, about 3 months later, he got a letter in the mail for different magazines and what-not, different subscription services. Now, his last name was different than his mothers name, and the way he signed his name, you couldn’t read his last name. So, is HP selling their customers information without their knowledge? Will the FTC take them down? It’s a shame that everyone online automatically assumes that online marketing / advertising is a crime.

  2. FTC is a mess of Scum sucking organized mafia DirtBags that have NO idea about online marketing. Look at MSNBC and see all the ads that they can not do anything about because they are being served on a major network and cant afford to prosecute against because they will not win. So they will pick on easy pry like small networks and affiliates that will just settle and close doors. It’s a same that these thugs are actuality a part of the American government.

  3. Bash the FTC if you must, but understand that taking shortcuts and misleading consumers usually doesn’t last forever – sooner or later things go south.

    It’s a shame to see affiliates and networks left holding the bag, but given what consumers were experiencing it was only a matter of time – we saw this with negative option offers, celebrity endorsement ads, flogs etc etc. To say the FTC doesn’t understand I.M. May be partly true, but as a complaint driven organization they respond to what consumers are whining about most. Guess what: that’s the “hot” offer of the week in many cases, especially if it promises the moon and delivers dissapointment.

  4. All these networks running these scammy type offers have and will continue to fall by the way side. Networks need to learn. The hot offer or flavor of the month offer will not be scalable or sustainable. Consumers are getting wise to this and are taking action. Stick to major brand offers, offers that consumers actually want. Do not deceive them and you will be ok.

  5. Come on guys, lets get real here.. There is deceptive advertising in EVERY biz model, all the way from Banks to McDonald’s. Also Negative option ads are all over TV, Ever watch TV late at night? Fake endorsements, fake testimonials, using actors as real customers, Free trials, all this crap is on TV. I’m sure there are as many pissed off customers buying from TV ads as there are online customers. Why isn’t NBC, CBS, ABC and FOX being fined and sued?

    Here are a few samples of ads and scams STILL on TV>>
    Miss Cleo, Shamwow, Video Professor $6.95 shipping, Scalp Med (ever see that spray on hair?), Dual Action Cleanse, Lazer Vacuum, Acai Berries (YES STILL ON TV), Ab Belt, Obama Coins, Cash 4 Gold scam, Neckline Slimmer, Head-On, Debt Consolidation, Extenze, Enzene, IGNITECIG 877-6520206 Trial $4.85 then billed $109 15 days later..

    COME ON GUYS, why is this crap still on TV? So please don’t blame the POOR internet shoppers, that can see the full TERMS in front of them, unlike TV ads.

    It’s all about money, if you are a big player like these major networks, you can get away with serving these ads.

    So next time you buy a Big Mac tell them you demand 100% PURE BEEF and you want the sandwich to look just like the one on the poster above the cash register.

    Internet should not be the one to blame here, it’s stupid people that don’t spend the time to read the terms.
    Even if the terms were on a BIG flashing marque with the words “YOU WILL GET SCREWED FOR $300” they would still order it and bitch later.

    FTC has no balls to take on the big boy, because they would fight it tooth and nail. If all the above TV ads were taken down, that would cut at least 20% of ad revenue for them as a whole, equaling BILLIONS.

    Yet the small fish internet advertiser trying to make a business gets screwed at the end of it all..

    Just my 2 cents.

    1. The media companies and Electronic Retailing Association have spent millions educating (lobbying) the federal government. The performance marketing industry players not named google have not. That’s why.

  6. While I’m not sure I agree with or would necessarily use some of the methods Adteractive was alleged to have done in their business, I can agree with the others here that it is sad to see them die like this. Some win and some lose, I guess. It’s unfortunate no one will be paid, though.

  7. i guess they realize the saying of “Life is full of surprises”. And too much confidence and self-reliance is
    not good.

  8. Wow! Interesting to see such huge movements from top to bottom…Too bad that so many online companies are in trouble, though.

  9. If all the above TV ads were taken down, that would cut at least 20% of ad revenue for them as a whole, equaling BILLIONS.

  10. Question is how will this effect other companies owed monies by them? I hope Neverblue isn’t one of them considering the bankruptcy filing of its parent company.

  11. If all the above Television set advertising have been removed, that would minimize at the very least 20% involving advertisement revenue on their behalf as a whole, equaling BILLIONS.

  12. This is what happens when you mix semi-fraudulent offers with affiliates who can’t make money any other way than fluffing the ads.

    Face it, a lot of “internet marketers” are hustlers and con artists. They will say or promise anything to get that $1 payout for the email address they pried from someone while lying about the offer.

    If you send to a shady offer or one that has a seemingly high payout, you get what you deserve when the scam is exposed. You should really pay attention to who you send your traffic to. Affiliate network managers aren’t going to police it for you because all they care about is your traffic and adding a few extra $ to their commission checks so they can finally break that $35K per year mark…

  13. it is sad
    especially when people put there life savings into invest then busts up only to leave the little man out of pocket

    there should be some sort of protection set up so people involved with businesses get THEIR money back

  14. What a crock of B*S*! The FTC stop many of these big scams online rhet lie and cheat and thin k it’s all fair game.

    What next? Bash cops for stopping drunk drivers?
    ————————————————————-

    It’s a shame that so many companies are falling. The FTC/FCC doesn’t understand “Online Marketing”, if they don’t understand it, they automatically assume it’s bad.

  15. Adteractive has done some scummy things in the last few years. Normally, this would be sad news, and it is sad for their debtors. However, I know that within the last 3 years, after their bout with the FTC, they were placing online frauds to capture email addresses – saying one thing, only to obtain email addresses – actually stealing them because they would not provide the promise for address, or they indicated they were not going to use the address for sales then did, or refused to say the true use of the addresses for eventual crime. Then, once the addresses were bilked, they would sell them to many nefarious spammers – not your normal companies, but to scammy ones offering fake diplomas, fly-by-night insurance, loan predators and many, many unethical lead generators to sell the addresses to more nefarious types. They, along with at least one of their affiliates, sold to so many creepy-type, unknown spammers that the addresses eventually got sold to true criminals sending 419 frauds, illegal drug pushers, viruses, even child sx exploitation (one spam on that). This is just plain WRONG – to operate in a way that subjects innocent people to the smut of Trojans, hacks, porn, narcotics etc, all under a ruse whereby the addresses were not even provided knowingly or willingly to begin with. I am happy to see this is stopping, at least for Adteractive, and wish laws would change to protect our citizens and our economies from companies profitting from the World crime that steals so many millions out of the US local, state and national economies. Had the 419ers, etc harvested the addresses themselves, it would not be quite as bad, but these lead gernerators, back to the source of Adteractive plus affiliate are profitting from address sales that eventually go to criminals. Had Adteractve acted ethically, abided by the FTC guidelines or even owned up to their mistakes and stopped contacts with the nefarious email sellers (and stopped bilking addresses), rather than denying them, I would feel differently. I do hope the innocent affiliates, however (the ones NOT involved in selling addresses to criminals) do recoup what is owed them.

  16. I just want all these scammy Affiliate Networks dissapear, and just the big ones stay on the industry. There are so many histories talking about people that were scammed because of them!… and what about the big paypal? could some organization do something about them?… is just for me or they own more than 95% of that market? hmm?

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