OCTOBER 2003 UPDATE SINCE THE RECEIVERS WEBSITE IS DOWN!
The money was released to the lower court of Baldwin County Alabama from the federal court in Maryland where it was interplead. The class action was settled first. This action covered those whose money was transmitted between March 3rd and March 21st 2000. A little over $1.6 million to mall owners throughout ALL 50 states has been paid in that action (many of these people had received commissions that reduced or eliminated the dollar amount of their claim).
The second action was an action to settle with the Michigan AG after she intervened in the above class. In this action approximately 16,000 Michigan residents were notified. It appears that there will be a little over $1.2 million paid out to residents who filed. The payments should be settled in full shortly after the first of the year 2004.
KM.NET REFUND MONEY TO GO TO ALABAMA AND MICHIGAN FIRST?
Attorney General Jennifer M. Granholm announced today that Michigan consumers who were cheated through an alleged on-line pyramid scheme into purchasing their own personal Internet "mall" would immediately begin to receive full refunds. The first wave of disbursements totaling $595,425.45 will be paid to 1,390 Michigan residents who purchased the Internet Malls from PowerCard International.
PowerCard, which operated under the name KM.NET, aggressively marketed the web malls in Michigan and other states. The malls were supposed to allow the mall website owners to make large profits when Internet surfers used the malls to make purchases. Ed Note: The average comes out $402 on payback. The orginal cost was about $300 per mall. That average means many getting the money back bought multiple positions. See the paragraph below on those getting refunds having commissions deducted! Smooth move.
Granholm said: "These Internet 'malls' were nothing but a pyramid scheme meant to bilk money from Michigan consumers. This trick, without any treat, was just a ghoulish rip-off exploiting the popularity of 'dot.coms.'"
Granholm filed suit against KM.NET in July 2001 and reached a settlement earlier this year. Michigan, which was the only state to file suit against the company, filed court pleadings in Michigan and Alabama while also monitoring a court proceeding in Maryland.
This first wave of payments is for consumers who purchased KM.NET malls during the period beginning March 3, 2000, and ending March 22, 2000, which resulted in the consumer's bank account being electronically debited on or after March 22, 2000.
The refunds represent the purchase price of the mall(s) minus any commissions actually received from KM.NET for the sale of Internet shopping malls. Some Michigan consumers purchased multiple malls. The second wave of payments will also cover those who purchased between the same period but will be for those claims requiring further verification. This wave of payments should be paid before the end of the year.
Granholm said: "While a wonderful educational tool, the Internet has become a haven for scams on unsuspecting consumers. We will do everything possible to protect Michigan families from the abuses technology can bring."
The settlement administrator anticipates that the total amount of refunds under the Alabama class action settlement will be approximately $2 million. If the settlement administrator has a question regarding a claim, the claimant will be contacted. Interested claimants should not contact Granholm's office but instead may contact the settlement administrator at 251-473-5550, or by writing to P.O. Box 70106, Mobile, Alabama 36670.
Once the payment for Alabama class members is complete, the claim process for Michigan consumers who purchased a mall at a time other than between March 3 and March 22, 2000, will begin under a separate Consent Judgment.
A message explaining the claims procedure will be posted on the claims administrator's KM.NET website at: www.rtbhpcilit.com. The Attorney General's website will also keep Michigan consumers advised of any updates from the settlement.
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