Becky’s Response to NetWinner

May 7, 2008

Steve,
In response to your recent letter regarding CompareRewards, which included inaccurate and misleading statements, I urge both you and my readers to read this entire response.
You were absolutely right about my inaccurate description of Dragon*Con. I truly appreciate your bringing this to my attention. I corrected my post and apologized to Dragon*Con privately. Dragon*Con did have several adult-oriented discussion panels in 2006, and former porn star Traci Lords was a featured guest.
I’m not sure if it’s relevant whether Xpeeps and NetWinner each sponsored one adult-industry panel at Dragon*Con 2006 or if they sponsored both of them jointly. That both were sponsors of one or both discussions is not an “unfounded insinuation” but a direct quote from a porn industry newsletter. NetWinner.com was listed by name in the article I excerpted in this post. The link is here for anyone who doesn’t mind viewing adult content. Re-read the source. If the source is inaccurate, your quarrel is with them. Provide me with a source for what NetWinner’s panel really was about, one that contradicts the source I already have, or go on the record personally with an explicit denial that NetWinner’s panel was adult-oriented and a description of what it WAS about, and I will happily append my post.
The article that I excerpted has been posted online since 2006. Why am I the bad guy for providing the same information on this website? Have you threatened that website with legal action, too?
I’m not sure how you can say that sponsoring an adult industry-related panel discussion is insulting and damaging to NetWinner. You admitted that NetWinner is financed, at least in part, by the Adult Entertainment Broadcasting Network’s founder, Scott Coffman. I noticed that Xpeeps, the sponsor of the other adult-themed panel, is owned by AEBN.
You offered the movie “Pulp Fiction” as an example of “adult content.” You call NetWinner’s connection to the porn industry “loose.” We must have different dictionaries, Steve. This is what I see:

  • You admit that Scott Coffman, founder of the Adult Entertainment Broadcasting Network, is an investor at NetWinner. (I’d love to know what percentage of the company’s stock he holds. Care to disclose?)
  • You admit that you and Coffman go way back, that you had interviewed him about his porn business and that you admired him, before being offered your position at NetWinner.
  • You didn’t deny that Coffman is the registered agent for process service at both AEBN and NetWinner, LLC.

I wouldn’t call these connections “loose.”
In fact, I would add that:

How can you have connections like these and then get indignant when they’re pointed out? (Oh, by the way, when you changed the WHOIS information for AdStreams to get AEBN’s name off of it, you forgot to update its Alexa page… it still shows AEBN as owning the domain. You might want to get on that.)
In your letter, you said, “NetWinner is a game that gives people a chance to win. There are no ‘earnings’ here; playing a free online game is not a job.” What exactly do you call the money you owe your members? Winnings? Okay, then, are you denying that the members’ “winnings” are a debt that your company owes and is extremely delinquent in paying? Saying that this wasn’t “earnings” and that it came from “playing a free online game” doesn’t get you off the hook for paying people what you owe them in a timely manner.
I was thrilled to see yesterday and today that some members are reporting finally receiving some of the payments (sorry, “winnings”) owed them by NetWinner. I have two sources that tell me they received a phone call from Matt Coapman asking them to keep the their conversation confidential, in which one was offered a partial payment on her account, and another was offered full payment when it was clear that partial payment was unsatisfactory. One source said that Mr. Coapman admitted NetWinner was paying the vocal, “disgruntled members” ahead of everyone else, and not to tell anyone. This source feels guilty for being paid out of order, which is she they told me. While I’m happy for those who are getting some or all of what they were owed, is this fair to those who have been waiting longer?
You stated that the delays are “primarily due to the company’s growth and continued diligence towards fraud protection.” But fraud has been a concern of NW since the beginning, as seen in this post by your Chief Technical Officer, Arion Hardison (aka “Netwinner”), as far back as July of 2006. Your head forum moderator, mjp, also posted about fraud at NW in July 2006. That was almost two years ago. What’s the holdup in getting this problem addressed?
My post regarding the status of Ecount payments was neither false NOR misleading, and I didn’t see you deny that NetWinner had made no payments to Ecount between March 13 and the time of my post, April 27. Did I miss that? Or were you just trying to deflect attention by saying that Ecount would have had to break their contract with you in order to divulge it? Not only did I have a source for that information (who emailed me personally in great detail), but I went a step further and talked to Theresa Wabler, Ecount’s VP and Marketing Manager. She told me that when Ecount receives funds from a client, they pay it out in 24 to 48 hours. If NW’s members haven’t been paid, she said, it’s because NetWinner didn’t pay us. That sounds like good enough confirmation for me, when you put that together with the payment reports (or lack thereof) that were on your own forum at the time. Are you accusing Ecount of being the holdup in your payments, or are you just upset that they told your members THEY weren’t?
“What is NetWinner?” Good question; glad you posed it. The definition seems to have changed. Formerly, members won not just instant-win prizes, but also points that converted to gift cards, merchandise, and more recently, Ecount credit. Now, it sounds like you’re saying that people should only play it for fun, not with the expectation of getting anything out of it. Did I misunderstand you, or is that the new NW model? I’m sure your members want to know.
Lastly, the email to which I’m responding (attached below for reference), which was posted on my site, yours, and all around the internet, appears to have been made not to address your members’ concerns, but to cast aspersions on my website and my personal reputation, as it was addressed “Company response to Compare Rewards” and “Becky.” If the true intent of NetWinner was to address its members concerns, some sort of email communication would have been sent to your members directly. My legal counsel has advised me that your characterization of my articles on NetWinner as “unsubstantiated,” “misleading,” “biased,” “[not] presenting the whole truth,” “unfounded insinuation,” “false and misleading, “insulting and damaging,” posted all over the internet, may constitute harassment, libel, defamation, and wire fraud.
While it will not repair the damage you have already done, I DO NOT expect a retraction, but I do expect that you will instead take the time and effort to communicate directly with your members so they don’t have to come looking to me, or at other websites, for the answers to questions like, “What’s going on at Netwinner?” “Why did they change their games?” and “Why haven’t I been paid?” I would also request that you change your terms of service to reflect the current, more realistic time frame of 180 days. Further, I would recommend that NetWinner close its doors to new members until it can pay the ones it has right now. These actions would help me and your current members restore our faith in NW and serve as a good faith example of your company’s ethics and fairness.
In closing, I suggest that you please consider carefully before making any further misrepresentations about me, my website, Ecount, or the members who have stepped forward as information sources.
Oh, and by the way…I also reserve the right to take further action as necessary.


- – - – -
Becky:
In response to your recent posts regarding NetWinner, which have been inaccurate and misleading, I urge both you and your readers to read this entire response.
In our previous exchange, I found you to be diligent in trying to present the “truth” and both sides of a discussion to your audience. More recently though, your “reporting” has become biased and unsubstantiated and is a disservice to your readers.
With more than 25 years experience as an investigative reporter/writer, and now under contract to NetWinner, I do my fact checking with great diligence. If you had done your research properly, you would have let your readers know that the annual Dragon*Con in Atlanta with more than 30,000 attendees does not have anything to do with “porn” but is actually, according to their site, “the largest multi-media, popular culture convention focusing on science fiction and fantasy, gaming, comics, literature, art, music, and film in the U.S.” It’s a family friendly event with fans dressing as Klingons, Superman, Harry Potter, and other characters. More information can be found at www.dragoncon.org.
If you were presenting the whole truth, you would also have made the distinction by reading the industry newsletter that you excerpted that there were in fact “two separate discussion panels sponsored by xpeeps.com and NetWinner.com” and determined that the discussion panel hosted by NetWinner at Dragon*Con had nothing to do with the other one.
Your unfounded insinuation is both insulting and damaging to both Dragon*Con and NetWinner. There was nothing odd about the “business decision”. Why wouldn’t the company want to see if NetWinner’s casual games could find an audience with a sci-fi, game-oriented gathering?
NetWinner is a game that gives people a chance to win. There are no “earnings” here; playing a free online game is not a job. It’s a privilege. If you don’t enjoy it, don’t play. If you do, please continue.
As a venture-backed start-up company, NetWinner is unbiased in its pursuit of potential investors, as any company should be. Mr. Coffman has invested in NetWinner, as well as many other companies and industries, not unlike many other successful businesspeople. If your readers have issues with loose connections to “adult” content, they may also consider boycotting HBO, Cinemax, or Showtime, reading any magazines from Time Warner or Hearst Corporation, buying any products from General Electric, and staying in any hotels with pay-per-view movies. They might also boycott Hannah Montana and other Disney content, perhaps even Disney’s advertisers, since their companies produce controversial “adult” content including movies such as Pulp Fiction, Cold Mountain, and many others.
You are indeed correct I wrote an article about Mr. Coffman. I was assigned the article six years ago by a business magazine and was very impressed by the entrepreneurial spirit and success of the man I interviewed. I also wrote for that magazine about a professional bass fisherman, an auto racing safety expert, a billionaire auto dealership owner, and an Olympic track coach. I have written for hundreds of major magazines and newspapers including Time, USA Today, the Chicago Tribune, the San Francisco Chronicle and Playboy among others. I’m proud of all my work. When presented the opportunity to work for NetWinner several years later, I gladly accepted.
As for the backlog in prize fulfillment, it is a primary concern here and we are working fervently to not only bring it up to date but improve it going forward. The reality remains that NetWinner has paid over 20,000 individuals in instant win and redeemed cash and prizes since its inception less than two years ago. The delays in fulfillment are an ongoing concern and are primarily due to the company’s growth and continued diligence towards fraud prevention.
Your information regarding the company’s status with Ecount, a MasterCard solutions provider owned by Citi Group was also false and misleading. Any person at Ecount who would divulge company information would violate legal confidentiality agreements, which would constitute an egregious breach of contract.
What is NetWinner? It’s a business based on giving lots and lots of people a place to have fun while playing engaging casual games with the chance to win some cash and prizes. It is and will always be free to play because of its advertising-supported model. For the player, it’s meant to be an enjoyable diversion, not a career. It’s an opportunity to win cash and prizes, not an obligation.
Lastly, reviews of posts made by you on your site and others such as gather.com, by legal counsel has caused them to inform senior NetWinner management that these false representations, as disseminated, may constitute malice aforethought, libel, and wire fraud. While it will not repair the damage you have already done, we expect a retraction and ask that you please consider carefully before making any further misrepresentations about NetWinner. We reserve the right to take further action as necessary.

Steve Goldberg
Director of Communications
NetWinner LLC
steve.goldberg@netwinner.com

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