Internet Lawyers Blog | LegalZoom.com Faces Consumer Fraud Class Action
Internet Class Action Update:
There are a lot of people out there wondering if Legal Zoom is a scam. Legal Zoom essentially takes publicly available forms, re-packages them, provides non-legal consumer support fee and offers the form for sale to the public. For many people who are prone to 'do it yourself' and for those who don't know or want to pay an internet lawyer, legal Zoom is a solid consumer option for trademark registration.
OFL has a comprehensive list of information posted on the internet about Legal Zoom which contains informational content, consumer reviews and other assessments of the Legal Zoom service and business model. Click Here.
Some people take issue with Legal Zoom's marketing which, to some, suggests that you will receive some level of help from real internet lawyers, or that their forms were developed by attorneys. If you read the disclaimer, you are advised that Legal Zoom does not provide attorneys or legal internet law advice. Other people take issue with the fact that many of the forms which Legal Zoom uses are already available on-line for free. For instance, Legal Zoom re-packages the otherwise already available free trademark forms through the USPT.gov Trademark Office. Finally, some point out that even if the legal Zoom customer is able to navigate the examination process on their own without legal, their trademark registration, for instance, might be unenforceable because of technical errors which would have been obvious to any trademark attorney. Legal Zoom can give customers a false sense of security and success.
Legal Zoom was recently sued on allegations of consumer fraud related to its trademark registration fees of $325. Actually, the registration fees vary depending on whether the filing is electronic (which it always is with LegalZoom.com) and which eTEAS system is accessed. Is Legal Zoom a scam? Keep reading ....
LegalZoom appears to have used a USPTO service with a registration fee of $275.00, but represented on its web site that 'hard' or "pass-on" "Standard Government Filing Fee" was $325. LegalZoom has since changed its web site to add a $50 administrative fee to the USPTO filing fee.
As alleged in the petition, LegalZoom charges consumers a "U.S. Government Filing Fee (required)" of $325 and a $159 service fee to file a trademark application with the USPTO. But LegalZoom pays $275, the actual fee for the USPTO's TEAS Plus (Trademark Electronic Application Service), and has been overcharging consumers since July 2005, when the TEAS Plus application service took effect, Solotko alleges.
"They're misleading consumers," contends Robert Kleinman, a shareholder in Austin's Sutton Kleinman and one of the internet attorneys representing Solotko.
Solotko says in an interview that after LegalZoom filed the trademark application, he determined through research of USPTO public records that the actual government fee for the TEAS Plus application was $275. "Once I discovered this, I realized there were probably many, many people like me," says Solotko, who paid an extra $50 for his filing.
On-line retailers, merchants and service providers must be extremely careful to ensure that its on-line information is extremely accurate on deliverables and pricing. Internet lawyers at Traverse Legal expect to see an growing trend in these types of consumer class actions against on-line web service providers and e-commerce retailers.