The name Jesse Willms may not strike a chord with most people, but if you’ve been on the internet within the past decade, then chances are you’ve seen his work. Ads littering the cyber landscape with claims such as “Find out the amazing secret this mother used to lose 50lbs!” and “AciaMax, as seen on Oprah!”, have become so woven into the fabric of the internet that most of us don’t even take notice to them. Although some of us were turning a blind eye to these ads and their grandiose claims, there was plenty more who fell for them hook, line, and sinker.
The man who would become the internet’s greatest villain gained his first fortune before he was even legally allowed to vote. At the age of 16, Willms had the idea to pick up software for pennies on the dollar and then resell it through a website like Ebay for a $20-$30 markup. After doing this for a while and discovering that he had a knack for peddling software, with his mother’s permission, Willms dropped out of high school and started his first business – eDirect Software.
Employing 10-12 of his former classmates, Willms quickly built a reputation around his hometown as a business prodigy. eDirect grew quickly, and forced to abandoned his previous business model of supplying the software upon order, Willms began obtaining software through any means necessary. Some copies may have been from legitimate sources, others were questionable in nature. The business became less about the product he was supplying, and more about convincing the customer that the product they received was completely legal to install on their computers.
Eventually his shady practices caught up with him and, at just 18, Willms was sued by Microsoft. His PayPal account containing $200,000 was seized, along with 66,000 counterfeit Microsoft products. What Microsoft’s legal team thought was just a small-scale operation had surpassed anything else they had previously encountered in similar cases. Obtaining his own legal team, Willms fought back claiming that he had done nothing illegal. His defense did not hold up in court and Willms was forced to settle for a six-digit sum, surrender two Lamborghinis and a Dodge Viper he owned, along with agreeing to never sell Microsoft products again.
Willms’ story doesn’t end there though. In spite of all the legal grief eDirect had brought him, Willms was determined to get his fortune back. Through research he discovered that he could make a lot of money selling weight-loss products, primarily Wu-Long Tea. With the help of a white-label distribution company – a company that creates generic products in order to repackage them as other brands, Willms began building his new empire.
Under the name Just Think Media, Willms set up a number of deliberately deceiving websites. To the unassuming user, the websites Willms designed appeared to have been put together by a team of doctors, nutritionists, and dieticians. Often they were full of completely false claims – like that the products had been seen on national tv shows, or had won industry-specific awards or notoriety. Even when the manufactures of the original Wu-Long tea had discovered that Willms had not only stolen their product, but their site design, Willms simply changed the name and continued on with his profitable deception. Soon Willms would have his hand in a number of diet and health-related products including acai berry supplements, teeth whitening products, detoxification products, among others.
Snake-oil salesmen have been around for centuries, what made Willms an innovative con-artist wasn’t his ability to sell large quantities garbage products; it was the way he sold them. By taking advantage of affiliate advertisers through top websites such as facebook, google, and others that people access every day, he was able to quickly get word out about his bunk products. Secondly, he didn’t promote his products under the same name; he would sell the same product under a dozen or so different names – all with their own bogus websites and affiliate ads. The sheer volume of advertisements, combined with promises of “risk free trials” and “money back guarantee”s, was enough to generate hundreds of sales daily. Even after the complaints began rolling in to the third-party sites that ran these dubious advertisements, there was little incentive for them to take them down, since Willms paid a much higher referral premium than other advertisers in the industry.
Underhanded selling tactics may have lured in customers, but the relatively low cost of the items Willms was pushing wasn’t enough to fund lavish trips to Vegas or high end sports cars, where the real money was coming from was through his unscrupulous billing system. For Willms, the product he was selling was never what was important, what was important is that credit card numbers were collected. For months customers would be charged for products they did not order, obscure fees for random amounts, and even when the customer called to complain, they may still be subjected to other bizarre charges. Some customers were forced to cancel their credit cards, even after contesting the charges with their bank or credit card company.
In 2009, after 2,500 BBB complaints had been filed about Willms and other companies following similar business models, the FTC began their investigation. Although other companies were doing the exact same thing, Willms was by far the largest scale operation they had encountered. From weight-loss products, work-from-home schemes, and penny auctions, it seemed that Willms had his mitts in everything. Fearing he would lose his ability to process credit card transactions, Willms acquired a handful of shell companies who only served to sign papers and redirect customer complaints through a channel of support lines, some of which did not exist. Padding search results with philanthropic efforts and inspirational articles, Willms scrambled to hide any negative press that could be found about him.
It wasn’t until 2011 that the FTC was finally able to take action against Willms. Attempting to fight the suit against him, Willms’ legal team provided screen captures of small print indicating everything the customer was agreeing to, but it failed to have any leverage in the case. In spite of the disclosure, the FTC determined that customers were rightfully under the impression that the product would be free without obligation. Again forced to sell off a number of high-ticket personal possessions and pay a whopping $359million settlement, with a restriction on his ability to sell subscription-based services, it would have appeared that Willms’ business was beginning to unravel.
Many would think that the FTC’s investigation and resulting civil case against Willms would have shut him down for good; unfortunately Willms is still operating through other nefarious corners of the internet. Leaving the weight-loss world behind, Willms now focuses on information services- such as car history and criminal record reports. Affiliate advertisers and misleading websites continue to be a foundation for these businesses, and a quick search will pull up hundreds of complaints about consumers being defrauded through these sites. Questions have been raised as to whether the websites that continue to serve these advertisements should be held responsible in some way, but to date there is no such policies in place. Until reforms are made, it is the responsibility of the consumer to investigate the products or websites they are supplying their credit card numbers to and to take any possible action necessary to have these fraudulent sites shut down for good.