The Ripoff Report ‘Business Model’

Note: this page is in the process of being updated

Ripoff Report is a privately owned for profit website that purports to be representing consumer interests. One of the most contentious websites on the internet, Ripoff Report admits that it publishes false information about individuals and businesses.

The Ripoff Report editor, Ed Magedson has been exploiting the website’s high Google page rank for close to 15 years.

Chikita noted that the highly sought after top spot in a Google search for a product or service obtains more than 32% of the traffic.

The drop in traffic volume between the last position on a page and first position on the next page was high. The traffic dropped by 140% going from 10th to 11th position and 86% going from 20th to 21st position.

Google has been aware of Ripoff Report’s extortion for at least a decade. It earns an annual income of around USD$15 Million. Detailed information about Magedson’s criminal past and current employees is available on Paladin’s blog.

Ripoff Report states that it does not remove material, even if it can be proven to be false or if the author requests removal. This is a lie. Magedson removes reports about himself. Ripoff Report also has a long history of removing or altering the content for a substantial payment.

Because it is given a high page rank in the Google SERPS, many companies pay the exorbitant fees to participate in the Corporate Advocacy Program (CAP) in order to have their ‘reputation rehabilitated’. This cost schedule for the CAP was entered into evidence in a US court case. This amounts to between USD $7,500 and $20,500 plus a monthly fee.

In 2011 a US judgement labelled the website’s business practices as ‘appalling’:

The business practices of Xcentric, as presented by the evidence before this Court, are appalling. Xcentric appears to pride itself on having created a forum for defamation. No checks are in place to ensure that only reliable information is publicized. Xcentric retains no general counsel to determine whether its users are availing themselves of its services for the purpose of tortious or illegal conduct.

Even when, as here, a user regrets what she has posted and takes every effort to retract it, Xcentric refuses to allow it. Moreover, Xcentric insists in its brief that its policy is never to remove a post. It will not entertain any scenario in which, despite the clear damage that a defamatory or illegal post would continue to cause so long as it remains on the website, Xcentric would remove an offending post.

Ripoff Report: Damage to Lives & Businesses 

Ripoff Report also has no compunction about publishing the identities and photographs of minors as well as content that is clearly offensive, homophobic, racist, and misogynistic as well as content that exposes children to danger. The impact of Ripoff Report’s Google enabled racket of reputation assassination and cyberbullying for profit is catastrophic. Many parents have pleaded with Ripoff Report and Google to at least remove the identifying details about their children without success.

Many ordinary people cannot pay $10,000 per webpage that falsely names them as ‘paedophiles’, ‘whores’, ‘murderers’, ‘skanks’ and ‘drug abusers’ and face global public humiliation, the ruin of their careers and businesses, and have to live with the fear that their children will be harmed or cyberbullied. Individuals, families and small businesses are rendered socially, vocationally, emotionally and financially paralysed by this criminal operation.

The despair caused by Magedson is reflected in the comments on this petition to Google to remove the website (mouse over view next to the comments) and this website.  It is clear from this article in Forbes that Magedson enjoys the pain that he inflicts.

Anyone who challenges Madgeson on his methods of extortion, including me, has found that they are suddenly the subject of further content on Ripoff Report or that the number of reports or links to reports suddenly multiply and old material gains new life in the Google search engine results page (SERPs).

Some victims have reported that Ripoff Report has offered to remove the false reports about their businesses for a fee that amounts to thousands of dollars. They have has always denied these allegations. However,  evidence unsealed by the State of Iowa proves that Ripoff Report, Ed Magedson, and the website attorneys Jaburg & Wilk have, for years, been involved in, and cognisant of, the use of the website and its high Google page rank to obtain substantial benefits by using tactics that amount to extortion and obstruction of justice in the US court system.

Ripoff Report Verified Safe?

Payment to Ripoff Report results in removal of the damaging content from the Google search engine. These screenshots of Google search results show before and after payment:



Because most consumers search online before buying products or services a Ripoff Report verification enables less than reputable businesses to disguise the fact that that they are a danger to consumers. In fact, companies that have paid Ripoff Report to be ‘verified safe’ have been indicted and prosecuted in both Australia and in the US as well as listed as defendants in class action lawsuits.

The company, ‘Storesonline (IMergent’) has more than 400 reports and for many years it paid Ripoff Report for an endorsement of ‘verified safe’.

Yet, while it was apparently ‘verified safe’ by Ripoff Report, this company was hauled into court in 2010 by the ACCC for breaching the Trade Practices Act. Moreover the judgement from the Federal Court found that StoresOnline failed to comply with undertakings provided to the ACCC on 24 April 2006 under section 87B of the Trade Practices Act 1974.

While ‘verified safe’ by Ripoff Report, Storesonline (IMergent) was also faced with class action lawsuits in several US states including  Texas, Connecticut and Arizona (the location of ripoff Report).

Direct Buy was the defendant in a multiple class action lawsuits while Ripoff Report was promising consumers that it was (paid) verified safe. By  2012 the company was no longer a member of the Ripoff Report Corporate Advocacy Program although evidence of its involvement can still be found in consumer comments. 

If a company that is ‘verified safe’ by Ripoff Report is indicted for fraud, the website simply drops it from the corporate advocacy program. Of course, this does not help consumers who used the ‘verified safe’ to decide to spend or invest their money.

One example is George S May International. It joined the CAP in 2006 with more than 60 reports.

By 2011 George S May had folded. This was preceded by years of decline marked by consumer online complaints. But it was only Ripoff Report that praised its business practices – for a hefty fee, of course.

Another example is the company, Bankcard Empire. It too was verified safe right up until the owner was indicted for fraud.

In yet another example, this company was dropped from the CAP several weeks after a prosecution was announced by the Attorney General of Colorado.

Of course, if one happens to own Google, demands to are quickly met by the website. In 2008 the name of a Google founder, Sergey Brin, published on a Ripoff Report that alleged he has inappropriate contact with a minor was altered on the website, because, of course, the ability of the website to profit is dependent on google’s page rank.

This was admitted by Ripoff Report attorneys in a document filed in one of the many cases in which it has been a defendant in the USA.