STATE OF FLORIDA OFFICE OF THE ATTORNEY GENERAL,

DEPARTMENT OF LEGAL AFFAIRS

IN THE INVESTIGATION OF:

ECOM INTERACTIVE, LLC d/b/a ZBIDDY.COM, and GILBOA MERDINGER, individually and as Manager of Ecom Interactive, LLC,

Respondents

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Case No. L12-3-1029

ASSURANCE OF VOLUNTARY COMPLIANCE

PURSUANT to the provisions of Chapter 501, Part II of the Florida Statutes, Florida's

Deceptive and Unfair Trade Practices Act, the Office Of The Attorney General, Department Of

Legal Affairs (hereinafter referred to as the "Department"), caused an investigation to be made

into the business practices of Ecom Interactive, LLC d/b/a Zbiddy.com and Gilboa

Merdinger, as Manager of Ecom Interactive, LLC. (hereinafter "Respondents").

Ecom Interactive, LLC is a Florida for profit Limited Liability Company with its

principal place of business registered as 2200 S.W. lOth Street, Deerfield Beach, Florida 33442.

Ecom Interactive, LLC maintains the fictitious name "Zbiddy .com."

Gilboa Merdinger is an individual residing at 6944 173rd Street, Fresh Meadows, New

York 11365 and is the principal and manager of Ecom Interactive, LLC and, as such, controls its

policies, activities and practices.

The Department, by and through the undersigned Assistant Attorney General, and the

undersigned Director of the Consumer Protection Division, being in agreement, accept this AVC

in termination of this investigation, as set out in the terms of this A V C, as to Respondents only,

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pursuant to Section 501.207(6), Florida Statutes, and by virtue of the authority vested in the

Department by said statute.

I. STIPULATED FACTS

The Department and Respondents hereby agree and stipulate to the following:

1. During the time frame beginning at least 2010 through the present, Respondents

have engaged in the business of operating a "penny auction" website located at

www.zbiddy.com. The website sells general consumer products, including, but not limited to

electronics, gift cards and travel vouchers.

2. The Department has investigated allegations, including, but not limited to, that

Respondents misled consumers through advertising practices into believing registration was free,

charged consumers unknowingly for bid packages upon registration.

3. Respondents make no admission that they engaged m any wrongdoing or

committed any violation of Florida Statute 501, Part II. This AVC contains neither findings of

fact nor conclusions of law.

4. Respondents and the Department desire to resolve all issues arising during the

course of this investigation and jointly participated in this settlement negotiation.

5. This AVC is based upon the stipulated facts set forth in Paragraphs 1-4 above.

The Department shall not be estopped from taking further action in this matter should the facts

described herein be shown to be incorrect in any material way, or the AVC not be complied with

in full by Respondents.

II. INJUNCTIONS

6. Respondents agree to comply with the voluntary injunctive relief set forth in this

Section II.

7. The terms used herein shall have the following meanings:

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---'----

7.1 "Penny auction" or "penny auction website" shall mean an online auction

where participants purchase or receive "bids" that must be spent to participate in the auctions for

individual consumer goods. The bids may or may not cost money and may or may not raise the

price of the consumer goods in the auction by an amount equal to $.01. Penny auctions do not

include online auction websites where consumers participate in auctions free of charge and pay

money only upon winning an auction.

7.2 "Clear and conspicuous" (including "clearly and conspicuously") means

that a statement, representation, claim, disclosure or material term being conveyed is presented in

a way that a reasonable' consumer will notice and understand it. The following, without

limitation, shall be considered in determining whether a statement, claim, term, or representation

is clear and conspicuous:

(a) whether it is of sufficient prominence in terms of font, size, placement,

color, contrast, duration of appearance, sound and speed, as compared with accompanying

statements, claims, terms, or representations so that it is readily noticeable, understandable, and

likely to be read by the person to whom it is directed; and if written or conveyed electronically,

the terms are not buried on the back or bottom, or in unrelated information or placed on a portion

of the page that a reasonable person would not think contained significant information;

(b) whether it is presented to the person(s) to whom it is directed in a coherent

and meaningful sequence with respect to other terms, representations claims or statements being

conveyed;

(c) whether it is near to or in close proximity to the statement, representation,

claim, or term it clarifies, modifies, explains, or to which it otherwise relates;

(d) whether it contradicts, or renders ambiguous or confusing, any other

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information with which it is presented;

(e) whether, if it is oral, it is at an understandable pace and in the same tone

and volume as the sales offer;

(f) whether it appears for a duration sufficient to allow listeners or viewers to

have a reasonable opportunity to notice, read, or otherwise understand;

(g) whether the language and terms used are commonly understood by the

consumer in the context in which they are used;

(h) whether it is presented in such a way as to be free of distractions,

including but not limited to sound, graphics, text or other offers that compete for the attention of

the consumer;

(i) whether, in advertising on the Internet, it is made on the same page as any

other term, statement, claim or representation that it modifies, and either above the fold or clearly

referenced or linked to a location below the fold;

(j) whether the disclosure, term, condition or representation appears on the

Internet on a co-registration order path in which numerous offers for various goods and services

are represented to be free, and the consumer is required to accept a certain number of offers.

8. Respondents, including their representatives, agents, employees, successors,

assigns, independent contractors, third party servicers or any other person who acts under, by,

through, or on behalf of Respondents, directly or indirectly, or through any corporate or other

device, shall not:

(a) Violate the Florida Deceptive and Unfair Trade Practices Act, Chapter

501, Part II, Florida Statutes, or any provision thereof;

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(b) Make any representation, expressly or by implication, that does not

comply with any applicable rule or regulation established by the Federal

Trade Commission or any other regulatory agency which is responsible

for oversight of the product or service being advertised;

(c) Represent in any manner, directly or by implication, any characteristic of

any penny auction unless at the time of such representation, respondents

possess and rely upon a reasonable basis for such representation,

consisting of competent and reliable evidence which substantiates such

representation;

(d) Make any misrepresentation in the context of any advertising of a penny

auction, including but not limited to labeling Respondents as the "best" or

"number one" penny auction website, without a good faith basis for the

representation;

(e) Misrepresent affiliations with - or endorsements or sponsorships by -

any person, business, media outlet, organization, or government entity;

(f) Represent that a penny auction registration is "free" if a consumer 1s

required to make any purchase prior to placing a bid or if Respondents do

not clearly and conspicuously disclose any restrictions on a consumer's

penny auction website usage resulting from registration without payment;

(g) Represent, in the context of advertising of a penny auction, a "sale,"

"clearance" or any type of seasonal, holiday or temporary "deal" when the

prices and/or items advertised as part of the deal are based on the outcome

of a penny auction;

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(h) Make any claim, in the context of advertising of a penny auction, about

the purported savings resulting from any penny auction which uses the

phrase "up to" or words of similar import unless the maximum level of

performance can be achieved by an appreciable number of consumers;

(i) Make any representations, in the context of advertising of a penny auction,

comparing penny auctions to any other auction website or auction business

which does not require payment to make a bid without clearly and

conspicuously disclosing that the former require payment to bid while the

latter do not ;

G) Use any auto-bid script, bidbot, or other artificial computer program to

simulate bidding activity in the context of a penny auction websites,

whether auctions are timed or untimed; or

(k) Directly or indirectly engage in any act, system, scheme or plan that

involves non-bona fide or shill bidding in the context of any auction, be it

online, in person, traditional or a penny auction.

9. Respondents, including its representatives, agents, employees, successors,

assigns, independent contractors, third party subscription fulfillment servicers or any other ·

person who acts under, by, through, or on behalf of Respondents, directly or indirectly, or

through any corporate or other device, shall:

(a) Clearly and conspicuously disclose that advertised prices, discounts or

maximum performance claims do not include the cost of bids in the

context of a penny auction where the price of an item, amount of discount

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or stated maximum performance is being represented based on the

amount of the winning bid at the close of an auction;

(b) Clearly and conspicuously disclose any charges associated with

registration in close proximity to the submit button where the consumer

completes his or her order, without the use of pre-checked boxes, and

where it is likely that a consumer will see the terms and conditions before

the consumer incurs a financial obligation;

(c) Verify and obtain consumers' affirmative consent to Respondents' terms

and conditions by having them affirmatively click an "I Agree," "Submit

and Confirm" or similar link, agreeing to Respondents' terms and

conditions, without the use of pre-checked boxes;

(d) Cancellations/Refunds: Clearly and conspicuously disclose to customers

Respondents' cancellation and refund policies, including but not limited to

Respondents' refund policy regarding initial bid purchases, and maintain

adequate customer service capacity to facilitate cancellation requests that

comply with the cancellation and refund procedures;

(e) Upon a consumer's request for refund of unused bids, including a request

for refund on the entirety of an initial bid package purchase, maintain

adequate customer service capacity to facilitate said refund within seven

(7) business days of Respondents' receipt of the refund request so long as

the request is consistent with Respondents' refund policy;

(f) Complaints: Respondent ECOM INTERACTIVE, LLC will maintain

adequate customer service personnel to expeditiously examine, address

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and resolve all complaints related to Respondent ECOM INTERACTIVE,

LLC's business, continuation programs and trial offers;

(g) Correspondence: Remove a consumer's name, address, e-mail address and

all other contact information from Respondent ECOM INTERACTIVE,

LLC's database within five (5) business days of Respondent ECOM

INTERACTIVE, LLC's receipt of a consumer's request and initiate

further contact with said consumer only upon affirmative conduct by the

consumer.

10. Respondents shall make the terms and conditions of this AVC known to any

managers, members, officers, directors, employees, agents, independent contractors, third party

servicers or anyone else acting for or on behalf of Respondents as well as anyone involved in an

ownership, or employment capacity in any other businesses in which any Respondents are

involved. The obligation imposed by this paragraph is continuing in nature and shall apply to

new officers, employees, agents, representatives or any other persons who become engaged in

the entity's business activities, including any future business activities in which Respondents

engage.

11. It is further agreed by the parties that Respondents shall not affect any change in

the form of doing business, or the organizational identity of any of the existing business entities,

or create any new business entities as a method of avoiding the terms and conditions set forth in

this AVC.

12. Nothing in this AVC shall be construed as a waiver of any private rights of any

person or release of any private rights, causes of action, or remedies of any person against

Respondents or any other person or entity.

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III. STIPULATED PAYMENTS

13. The Department provided Respondents with a list of consumer complainants,

identified in Exhibit A. Respondents submitted an affidavit, identified in Exhibit B, detailing the

steps it has taken to respond to each such complaint which includes refunds of Nine Thousand

Four Hundred Eighty Dollars and 64/100 ($9,480.64) to consumers prior to the execution of this

AVC.

14. The parties agree that the Respondents shall jointly and severally contribute the

sum of Four Thousand Two Hundred Fifty One Dollars and 45/100 ($4,251.45) ("Restitution

Funds") which shall be used to pay the remaining claims of individuals who have filed

complaints against Respondents through entities including, but not limited to, the Department

and the Better Business Bureau. The manner in which the funds are to be distributed shall be

within the sole discretion and/or reasonable judgment of the Department.

15. The parties agree that Respondents shall contribute $15,000.00 (FIFTEEN

THOUSAND DOLLARS) ("Fees and Costs") to the State of Florida, Office of the Attorney

General, Department of Legal Affairs, in payment of all attorneys' fees, costs and investigative

fees regarding this investigation and future compliance and monitoring costs associated with this

AVC. All payments shall be made by cashier's check or other certified funds, made payable to

the Department of Legal Affairs Revolving Trust Fund. The payment shall be submitted to

Assistant Attorney General Katherine Kiziah, at 1515 N. Flagler Drive, 9th Floor, West Palm

Beach, FL 33401-3432, on or before January 31, 2013.

16. In addition, Respondents are directed to pay to the Department the sum of

$5,000.00 (FIVE THOUSAND DOLLARS) ("Escrow Funds") to satisfy future consumer

restitution for a period of sixty (60) days from the date of execution of this AVC. In the event

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actual restitution for future complainants exceeds the amount of the Escrow Funds, then the

Escrow Funds will be distributed pro-rata to the complainants who have submitted complaints to

the Department within the sixty (60) day period. However, no individual consumer who submits

a complaint in the sixty ( 60) day period will receive more than the amount of damages actually

sustained. Upon the conclusion of this sixty day period of time, any remaining monies shall

revert back to the Department of Legal Affairs Revolving Trust Fund.

17. The Restitution and Escrow Funds identified above shall be made by certified or

cashier's checks, payable to the Department of Legal Affairs Escrow Fund, and shall be sent

to: Assistant Attorney General Katherine Kiziah, at 1515 N. Flagler Drive, 9th Floor, West Palm

Beach, FL 33401-3432 on or before January 31, 2013. Upon receipt, the checks shall be

deposited into the Department of Legal Affairs Escrow Fund, in accordance with Section

501.2101 (1 ), Florida Statutes. If any restitution monies remain after the distribution of

restitution the Attorney General's office will deposit the remaining monies into the Department

of Legal Affairs Revolving Trust Fund and same shall be used to defray the cost of restitution

distribution and any attorneys' fees and costs incurred in enforcing this Judgment, or as fee and

costs associated with ongoing and future enforcements initiatives pursuant to Chapter 50 1, Part

II, Florida Statutes.

18. After the sixty (60) day time period is complete, Respondents are entitled to

request a list of those individuals who were sent funds in conjunction with this investigation

19. Simultaneously with the submission of the partially executed AVC signed by

Respondents, Respondents further agree to make a charitable contribution to the Florida Law

Enforcement of the Year Award in the amount of $10,000.00 (TEN THOUSAND DOLLARS),

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to be described in a separate letter of instruction. The Department will work with Respondents to

appropriately recognize this contribution.

20. Complaints that the Department receives regarding Respondents' after the above

sixty (60) day period and after the Escrow Funds are distributed will be sent directly to Gilboa

Merdinger at 382 NE 191 st Street, #76385, Miami, Florida 33179-3899; email:

gmerdinger 11 @gmail.com. These complaints for the sixty ( 60) day period sent by the

Department will be answered by Respondents within five business days of receipt and the

resolution of each of these complaints shall be communicated to the Department, in writing.

Respondents will maintain adequate customer service personnel to examine, address and resolve

all consumer complaints.

IV. BUSINESS RECORDS

21. Any personal or financial information provided by or relating to consumers in the

custody or possession of Respondents shall be securely stored in such a manner as to reasonably

protect against inadvertent disclosure of consumer information. Respondents including any

representatives, agents, employees, successors, and assigns, shall not, directly or indirectly,

market, sell, share or otherwise disclose the name, contact information, or financial information

of any consumer who provided any personal or financial information or any monetary payment

to Respondents.

22. Respondents agree to retain . documents and other information reasonably

sufficient to establish compliance with the provisions of this A VC for two (2) years from the

Effective Date of this AVC, and shall make any and all books and records available to the

Department within three (3) days of any reasonable request.

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V. FUTURE VIOLATIONS

23. It is hereby agreed by the parties that any failure to comply with the terms and

conditions of this A VC is by statute prima facie evidence of a violation of Chapter 501, Part II,

Florida Statutes, and will subject Respondents to any and all civil penalties and sanctions

authorized by law, including attorney's fees and costs.

24. In the event that a court of competent jurisdiction makes a determination that a

violation of any condition of this A VC has occurred, then Respondents shall be liable to a

Consent Judgment against of at least $10,000 per consumer transaction as authorized by Florida

Statutes Section-501.2075. The Department reserves the right to seek Chapter 501 penalties for

any future violation( s) of Chapter 501, Part II, Florida Statutes.

25. If the Department believes that a breach of this AVC has occurred, the

Department shall give written notice to Respondents of the specific alleged breach. Respondents

shall have ten (1 0) days from the date of notice to cure the asserted breach with notice to the

Department of said cure or provide other response or redress to the satisfaction of the

Department, within which time the Department agrees to refrain from filing an action with

respect to enforcement or compliance with this AVC. Should Respondents provide the

Department with a response or redress in lieu of documentation of a cure, the response shall

include (a) a statement explaining why Respondents believe the conduct at issue is or is not in

compliance with the A V C; and (b) an explanation of the facts and circumstances at issue in the

alleged material breach occurred; and, if applicable, (c) a statement that the alleged breach

cannot be reasonably cured within thirty (30) days from the receipt of the notice, but a detailed

statement as to how Respondents have begun to take corrective action to cure the alleged breach

and a sworn affidavit attesting that Respondents are pursuing such corrective action with

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reasonable and due diligence and proposing a detailed and reasonable timetable for curing the

alleged breach.

VI. CLOSURE OF INVESTIGATION

26. It is further agreed by the parties that upon the receipt of the agreed upon

payments from Respondents, the Office of the Attorney General agrees to close its civil

investigation into the activities of Respondents, as set forth above, without prejudice to any

remaining investigation as to other entities. The parties agree that this A VC has been entered

into based on the truthfulness of the information provided by Respondents.

VII. EFFECTIVE DATE OF ASSURANCE OF VOLUNTARY COMPLIANCE

27. It is further agreed by the parties that the effective date of this A VC shall be the

date of its execution and delivery by all the parties, including each of the parties reflected by the

signature lines below. Acceptance by the Office of the Attorney General shall be established by

the signature of the Director of the Consumer Protection Division. The receipt by the Office of

the Attorney General of any monies pursuant to the AVC does not constitute acceptance by the

Director of Economic Crimes, and any monies received shall be returned to Respondents if this

AVC is not accepted and executed by the Director of Economic Crimes.

28. It is further agreed that facsimile copies of signatures and notary seals may be

accepted as original for the purposes of establishing the existence of this agreement.

VIII. NOTICE TO PARTIES

29. It is further agreed that future notice to any of the parties to this A VC may be

made by notice sent certified mail to at the addresses set forth below unless either party notifies

the other by certified mail of another address to which notices should be provided.

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IX. CONSTRUCTION OF AGREEMENT

30. It is further agreed that the parties jointly participated in the negotiation of the

terms of this AVC. No provision of this AVC shall be construed for, or against, any party, on

the grounds that one party had more control over establishing the terms of this AVC, than

another. This AVC may be signed in counterparts, which together shall constitute one agreement.

31. Nothing in this Assurance shall be construed as a waiver of any private rights of

any person or release of any private rights, causes of action, or remedies of any person against

Respondents or any other person or entity unless expressly stated herein.

32. Notwithstanding any other provision of this AVC, nothing herein shall be

construed to impair, compromise or affect any right of any government agency other than the

Office of the Attorney General for the State of Florida.

In witness whereof, Respondents have caused this AVC to be executed in the county and

state listed below, as of the date affixed thereon.

By my signature I hereby affirm that I am acting in my capacity and within my authority

as corporate representative, as well as in my individual capacity, and that by my signature I am

binding myself and the business to the terms and conditions ofthis A VC.

SIGNATURE PAGE FOLLOWS:

14 Initials C) (1-1

ECOM INTERACTIVE, LLC

By: ~~-Its: _____________ _

STATE OF FLORIDA _ r)ss COUNTY OF (n\c;vv; --(l~ss

ll BEFORE ME, an officer duly aqthorized to take acknowledgments in the State of Florida, {;;1 _ '?u(; 1'1'-Vt\r-)((appeared (._.,/', who produced as identification. S/he

acknowledged ptore me that he executed the foregoing instrument for the purposes therein stated on th~ day of~U"v1 , 20_.!5.

Subscribed to before me this J.Y ~y of Cj ""'1 , 20 J3 NOTAR&~IC c --z.____ -(print, tfie:OYStamp commissioned Notary Public)

Personally kno~ Produced Identification (check one) Type of Identification Produced: - - -- ..... -- ......

GILBOA MERDINGER, Individually

By:.U ~

STATE OF FLORIDA )ss COUNTY OFr-:!c..~{)cc~ )ss

. ,,....... . • m BRENT A LEVISON ' • \\l :t>\ Notary Public • State of Florida ~ 4 • ;; My Comm. Expires Mar 22. 2017 , ~J' Commission # EE 855306 'I ,,,. ... ,,

/: (f BEFORE ME, an officer dy.ly authorized to take acknowledgments in the State of Florida, (9L~ac.("4/c\.-fo<" appeared ~ , who produced as identification. S/he

acknowledged be:!Pre me that he executed the foregoing instrument for the purposes therein stated on the Jt_~ay of sq'ti '20f~.

Subscribed to before me this ;;·v%ay of ~ trl"'{ , 201)-

,__/· (print, type, or stamp commissioned Notary Public)

Personally-known __ or Produced Identification ____ (check one) Type of Identification Produced: _________ _

,,, ..... ,,, ~'om·~~"v "~·-.. BRENT A LEVISON ~.r>J f\~ l. . i Notary Public • State of Florida

• \"}. rr! My Comm. Expires Mar 22. 2017 • '•,::,.,,o., .. ."<f;.'·/" Commission # EE 855306 'I ,,, ... ,,

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- -

Witnessed: ~

By:~~ Rhett Traband, Esquir ~ Broad and Cassel 2 South Biscayne Boulevard 21st Floor Miami, Florida 3 313 1

OFFICE OF THE ATTORNEY GENERAL

Dated: }/e,S{ 13

~~A Assistant Attorney General 1515 N. Flagler Drive, 9th Floor West Palm Beach, FL 33401 (561) 837-5000 (561) 837-5109 facsimile

Director,· Protection Division Department of Legal Affairs OFFICE OF THE ATTORNEY GENERAL The Capitol Tallahassee, FL 32399-1050 (850) 245-0140

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STATE OF FLORIDA OFFICE OF THE ATTORNEY GENERAL,

DEPARTMENT OF LEGAL AFFAIRS

IN THE INVESTIGATION OF:

ECOM INTERACTIVE, LLC d/b/a ZBIDDY.COM, and GILBOA MERDINGER, individually and as Manager of Ecom Interactive, LLC,

Respondents

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AFFIDAVIT

Case No. L12-3-1029

BEFORE ME, the undersigned personally appeared, Gilboa Merdinger, who, being duly

sworn deposes and says:

1. I am over the age of eighteen years and make this Affidavit of my own personal

knowledge.

2. I am the managmg member of Ecom Interactive, LLC (d/b/a Zbiddy.com)

("Ecom") and am authorized to make this Affidavit. I have personal knowledge of Ecom' s

business.

3. Attached as Exhibit A is a spreadsheet detailing the consumer complaints

identified by the Department as follows:

a. 102 consumers were refunded a total of $9,480.64

b. The remaining consumers who were not refunded total to the amount of

$4,251.45

FURTHER AFFIANT~ YETH NOT.

Dated this dl~ay of January, 2013 .

. L/-Jr~-GILBoA MERDINGER

CONFIDENTIAL - TRADE SECRETS

r(ar\~ STATE OF NEW YORK -

COUNTY OF ~c..-~ ---V)ctl.t_

) ):ss )

,--h . .rcl f 1 ~Sworn to (or affirmed) and subscribed before me this d.} day of January, 2013, by

612,\ ") '"'- (Wri:\':JV. ~ ,? -----z .: I (Signature of Notary Public)

J' (Print, Type, or Stamp Commissioned Name of Notary Public)

Personally Know:n.L__ OR Produced Identification __ Type of Identification Produced ______________ _

CONFIDENTIAL - TRADE SECRETS