The local search property, Citysearch.com, is coming under fire for its lack of a click fraud system.

According to a lawsuit filed yesterday in Los Angeles Superior Court, Citysearch.com is defrauding its advertising customers by not only turning a blind eye to click fraud, but the lawsuit states they are actually encouraging it.

Most click fraud cases involve companies that simply turn a blind eye to it, said the victims attorney, Brian S. Kabateck, Managing Partner of Kabateck Brown Kellner. Citysearch does this too, since it has no real program to prevent click fraud. But Citysearch goes beyond indifference to actively incentivizing click fraud. Citysearchs motive is simple: clicks equal cash, whether theyre fraudulent or not.

You may remember Kabateck from other paid search cases, including winning a multi-million dollar settlement from Yahoo! and playing a part in a $90 million settlement from Google on behalf of advertisers who were victimized by click fraud.

Kabateck has also recently filed a federal class action suit against Google for fraud within its AdWords system.

Citysearch, which is part of IAC/InterActiveCorp, and also controls Ask.com, pays commissions to its salespeople based on the number of clicks their customers ads receive. According to the lawsuit, this incentives click fraud practices.

Furthermore, the suit contends, contrary to Citysearchs own representations to its advertisers, it takes no real steps to prevent click fraud. And when customers become victims of click fraud, Citysearch fails to adequately advise them that they have been victimized or refund the money paid to Citysearch for that fraudulent activity.

The lawsuit seeks to represent all people or entities in the United States who paid money for pay-per-click advertising through Citysearch.com.

The lawsuit is heavily based on plaintiff Tom Lambottes experience with Citysearch.com, which he and his representation feel is a direct indication of click fraud. Lambottes Citysearch ad received a total of 7 clicks (plus two more that he generated) between December 11 and 25, 2007. On December 26 he received a response from Citysearch to his December 22 request to cancel his ad. Suddenly, his ad began receiving 12 to 16 clicks a day, for a total of 69 clicks between December 26 and December 31, when his ad was finally canceled. He received in these five days 10 times as many clicks as he had received in the previous two weeks. Despite this, Citysearch refused his repeated requests to reverse these charges.

Citysearchs Invalid Click Policy states:

Citysearch also has sophisticated algorithms to track sessions and user behavior on our site to assist us in identifying click patterns that would indicate invalid clicks. In the event we identify a click as invalid, our customers are not charged for such clicks.

As with most of these cases it seems that the burden of proof will be on the plaintiff to prove that the clicks in question were invalid. From the information in the lawsuit, it is obvious that Lambotte tried to cancel his account with the search vertical, but to automatically assume that the increase in clicks was caused by fraud and not optimization may be difficult to prove.

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