IMergent defends service after Illinois files lawsuit

Deseret News (Salt Lake City), Dec 21, 2006 by Andrew Harris Bloomberg News

IMergent Inc., an Orem-based Internet business-consulting firm, is defending its practices in response to a lawsuit filed by Illinois Attorney General Lisa Madigan accusing the company's subsidiaries of misleading customers.

The suit, filed in state court in Edwardsville, Ill., on Monday, claims that iMergent units StoresOnline Inc. and Galaxy Mall Inc. marketed themselves as offering customers an easy way to set up online businesses and then failed to provide technical support or give refunds to dissatisfied customers.

"We're quite confused by these allegations," iMergent General Counsel Jeffrey Korn said in a press release Wednesday. He said more than 10,000 Illinois residents have attended the company's workshops and only 11 complaints had been registered with Madigan's office. He said those complaints were "expeditiously resolved."

Fifteen Illinois customers, who paid a total of more than $91,000 to StoresOnline and Galaxy Mall, were unable to set up Internet businesses and couldn't get refunds, Madigan said in a press statement announcing the suit.

"Consumers need to be very skeptical of any marketing efforts that promise easy access to the world of Internet business," the attorney general said. Madigan's complaint claims the defendants violated the state's Consumer Fraud and Deceptive Business Practices Act.

The company denied the allegations in its press statement, adding it has not yet been served with the complaint.

One of the two defendants, Galaxy Mall, is a business iMergent acquired six years ago. "It has not sold anything to the public in five years," Korn said.

Imergent shares fell $3.17, or nearly 11 percent, to close at $25.68 Wednesday. During the past year, the price has ranged from $4.51 to $32.10.