Naveen Jain in the hot seat again after Seattle Weekly expose |
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Intelius founder Naveen Jain takes yet another public relations hit in a cover story in Seattle Weekly that details what some characterize as shady business practices of the Bellevue provider of phone numbers, background checks and other personal information.
Titled "Intelius and the Dubious Art of “Post-Transaction Marketing,” the story discusses an ongoing investigation by the Federal Trade Commission, a King County lawsuit alleging that Intelius misrepresented financial figures and hundreds of consumer complaints.
Some 822 complaints have been filed against Intelius with the Better Business Bureau and another 121 complaints with the state's Attorney General's office. (AG Rob McKenna -- who has been battling the company for months over its online marketing tactics -- tells Seattle Weekly reporter Nina Shapiro that "that's a lot of complaints about one company.")
The story comes 10 months after TechCrunch called Intelius' online survey techniques a "complete and total scam." It also follows an investigation by The Seattle Times in 2005 -- titled "Dot-con Job" -- detailing the activities of Jain at his previous company, InfoSpace.
Intelius didn't make Jain available for the Seattle Weekly report, though Vice President of Marketing and Sales Ed Petersen tells the paper that the fast-growing company has "evolved." Intelius offered this statement from Peterson when contacted by TechFlash today:
“Intelius is the leading provider of information commerce; and our Company, products and services have been recognized with many awards. We have millions and millions of paying satisfied customers. We provide information that empowers people to live safer lives. We encourage consumers to try our products and services for themselves.”
Shapiro's in-depth report -- quoting angel investors Vijay Vashee and Jon Staenberg as well as consumers who feel duped by the company -- points out some of Jain's recent philanthropic efforts in the community. But, for the most part, it casts a critical eye on the controversial tech executive.
Here's an excerpt:
Despite that fall from grace, the brash, Indian-born Jain has held on to the 12,000-square-foot Medina mansion he bought in 1999, as well as to his Icarian confidence. His personal Web site offers a 1,500-word tribute to himself, subtitled "Wizard of the Information Industry," that begins this way: "An extremely intelligent man with a commanding presence and a track record to turn heads, Naveen Jain has the kind of kinetic personality that sets fire to a room."
He also kept his personal credit card, which apparently has a very high credit limit. Shortly after leaving InfoSpace, he used the card to finance his new company. Over the next three years, he charged $14.3 million on Intelius' behalf, with the company paying him back monthly, according to SEC documents.
Now that Intelius is attracting complaints, litigation, and the attention of state and federal authorities, a question arises: How much of Jain's head-turning track record is he duplicating?
Worth a read.
John Cook is co-founder and executive editor of TechFlash. He has been covering the technology beat for nearly a decade, writing about startups, entrepreneurs and venture capital, most recently serving as a reporter/blogger at the Seattle Post-Intelligencer.
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