Is StormPay.com a Scam? Yes, It Is!
StormPay was one of the famous online payment services. I can say that after PayPal and e-Gold, it is almost the most famous one. Most people say it is a scam company while others say they have been working with StormPay and used its service without any problem and so it is not a scam website.
The second group are true. There are thousands of users who used the StormPay service without any problem but there are thousands of users who StormPay has robbed thousands of dollars from them. A company is not called scam only when all of its clients are scammed and ripped off. A good and reliable company should keep all of its clients happy. Before I explain why I know this company as a scam one, lets take a look at its records with BBB (Better Business Bureau):
1- From September 2002 through May 2005, the company received 44 customer complaints that 17 of them remained unanswered and unresolved.
2- From May 2005 through December 2005, the company received 18 complaints that were answered and solved!!!
3- They received more than 819 complaints from January 1 to February 16, 2006. As StormPay didn’t respond to any of these complaints and all of them remained un-resolved, BBB stopped processing the complaints. I have read in some of the forums that StormPay has received more than 20,000 complaints so far. I am not sure if this is true or not but I will explain later in this article that why this number can be true. However, even if we don’t consider the complaints that BBB received after February 16, 2006, StormPay has the highest number of unresolved complaints among all the companies that BBB covers.
4- This company was also involved in a Pyramind/Ponzi scheme program, TymGlobal, and the Tennessee Securities Division of the Department of Commerce & Insurance ordered to cease and desist the TymGlobal and StormPay on August 7, 2003.
Even before StormPay receives 819 complaints January and February 2006, it was known as a scam company by some people and you can still find their posts in several different forums. But something that made the StormPay as one of the most internet scams was its involvement with tens of different surfing/HYIP/Ponzi scheme programs that 12DailyPro was the most famous one.
12DailyPro was a Ponzi scheme surfing program that could collect over $50,000,000 from more than 300,000 investors worldwide in about ten months. StormPay was used to work as the payment processor of 12DailyPro and so all the money was collected by StormPay. StormPay became popular and famous during the time that 12DailyPro was up and running and its traffic became skyrocketed because of the 12DailyPro members.
The StormPay traffic was increased dramatically during the time that it was working as the payment processor of 12DailyPro but now its traffic is even less than the time that it started working (the year 2003) because nobody trusts it any more.
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Suddenly 12DailyPro decided to stop using e-Gold because of security reasons and add another payment processor to its system and it was the time that the problems were started. StormPay that was enjoying thousands of customers that were referred to it through the 12DailyPro business, got furious when found out that 12DailyPro wanted to add another payment processor to its system. They suspended the 12DailyPro account and blocked all the money they had. They also made several changes in their Terms of Service in a very short time and started suspending the accounts of the customers who were working with 12DailyPro. They not only blocked the money that 12DailyPro members had in their accounts but also robbed thousands of dollars from their bank accounts and credit cards. It means they charged the 12DailyPro members bank accounts and credit cards without any authorization.
Why did they do such a terrible scam?
If you ask them, they will say that 12DailyPro was a Ponzi scheme and so illegal and it is against the StormPay terms of service to use its service for such programs.
But 12DailyPro was Ponzi and illegal from the first day. Why did StormPay worked with it for about 10 months? On the other hand, working with programs like 12DailyPro was not against StormPay terms of service. They changed their terms of service right before they block the 12DailyPro account.
So they worked with illegal programs like 12DailyPro, collected millions of dollars from investors and then blocked their accounts, confiscated all the money they had in their account and robbed as much as they could from their bank accounts and credit cards. They did this for all the 12DailyPro members (about 50,000) and also the members of all other surfing programs that used StormPay as their payment processor.
They also designed another way to cheat people and collect more money. They established an identification database service named NetIBA. Nobody knew that NetIBA.com is belonged to StormPay. They only said that customers who join NetIBA will pay less commission to StormPay for any payment they make. 12DailyPro members rushed to join NetIBA and paid the yearly membership fee to pay less commission to StormPay. When StormPay blocked the 12DailyPro and its members accounts, everybody found out that NetIBA.com was created by StormPay and in fact they have been paying the same company to receive a service discount.
Almost all the members filed several complaints to BBB and websites like www.ic3.gov. That’s why I say that more than 20,000 unresolved complaints with BBB can be correct and I am sure there are much more now.
In spite of all these scam activities and although the Federal District Court Judge Nora Manella froze the assets of 12Daily Pro and Lifeclicks and the personal assets of Charis Johnson (the founder), none of the investors have received their money yet and StormPay is still up and running. Why?!
Is there anybody who can answer?
Other articles to read more:
The Scams that You Have to Know and Avoid
StormPay also lost their money transmitting license from TN back when they had those complaints, so they are not up and running as they used to be. Now I think they just accept payment for their auctions, ie. its an auction web, not a p2p or b2p payment system. They suck anyway.
Mark
Hi Mark,
Thanks for your comment. Yes I noticed that after I posted this article. Now the question is what happened to the money they robbed from peoples’ credit cards and bank accounts? Do you have any idea?
Anything is possible, but there are always 2 sides to a story.
That is a very well researched and accurate analysis of the StormPay scam. I was caught up in the 12 Daily Pro collapse and I believe that StormPay used the excuse of its being a ponzi scheme as a smoke screen for its theft of thousands of people’s money. StormPay was happy enough to take the cash for a long time, I cannot understand how they have been allowed to continue to trade.
Hi Flora,
Thanks for the comment.
As Mark has explained, StormPay also lost their money transmitting license from TN back when they had those complaints, so they are not up and running as they used to be.
I have question. As far as I know, the court is collecting the money that 12DailyPro had taken from investors and wants to return the money to losers as much as they can. Do you know if they will really do it or not?
Thanks for such a nice article..
I never used Strom Pay for payment but now obviously I will not use it because of suspect behavior. I truly agree with you. Storm pay creators are sick people and want money by doing fraud with its user.
I also lost my money in StormPay and until now my account is still suspended for OVER A YEAR!!!!!!!!
Hi Vahid
I have received several emails from the receiver for 12 Daily Pro -
Securities and Exchange Commission v. Charis Johnson, LifeClicks, LLC, and 12Daily Pro; USDC, Central Dist. of CA, Case No. CV 06-01018-NM(PLAx) - there is a website,
http://www.tlennonfor12dailypro.com with all the relevant information on progress in the case. The disappointment is that the case is against 12Daily, not Stormpay! There is a clear intention to share all the money recovered between the registered site members, but resolving this scam is going to take some time, I think.
Thanks Flora. Hope you and all others receive their money as soon as possible.
Bala Krishna, I am happy that this article was helpful to you.
Hi Flora
Well StormPay is back to their old tricks……. They have launched a new payment processor called Web2Check located at http://www.web2check.com. One thing that is not mentioned here is that StormPay was NOT their first payment processor. The first payment processor they launched was called BeaverPay, and they catered mainly to the porn industry. Then they stole all the money they were processing for porn sites and then launched StormPay.
Warn everyone you know NOT to join Web2Check!!! If you already have you should close your account with them A.S.A.P.
i just recieved a check for 86.99 from stormpay inc. out of clarksvile tn. i have no idea why i got this check. i haven’t sold anything online that wasn’t paid for thru paypal. i do have a buy here pay here car lot in indiana which i get checks and money orders in the mail from customers all the time as well as companies that i get parts from for credits/ returns.i have never even heard of stormpay. the return address on the envelope says netIBA inc. there is a reference number but no information leading me to believe it would be from one of our companies we use. most of our company contacts are local to us, within a 50 mile radius. would you or anyone have any idea why i got this check?
I do get a check of $ 2,476.89 (Legend Bank) for the money in my stormpay balance. No notr just a check. Well i believe that the court had instructed Stormpay to return whatever balance money in the accounts to the customers.
Christina, I too have received a check. Have no idea what this check is for. I cannot find anything on the web concerning checks being received and why. My Mother called the bank that issued the check and the account is good. Not sure what to do. Concerned about depositing in my account.
I received a check from stormpay today also. It’s only for $18.20 and drawn on Legends Bank, Clarksville, TN. I have NEVER had any dealings with this company that I’m aware of so I was concerned upon the arrival of the check. I look forward to research concerning the issuance of these checks and whether, by endorsing and depositing, I am opening my account to a group that I obviously don’t want to have my bank info.