August 28, 2001
Online currency company Flooz.com has ceased operations, fired its staff and says it will file for bankruptcy protection. The company had closed its online gift certificate operation earlier this month and has been trying to arrange a merger or sale of the business since then.
CEO Robert Levitan blamed "dramatic changes" in the capital markets and the slowdown in the economy. But the company has long had other problems as well, including mounting complaints from consumers and major losses due to credit card fraud.
Flooz basically sold online currency that could be used as a gift certificate at any of its partner sites, including Barnes & Noble, J. Crew and many others. With the site offline, the currency is valueless and gift certificates are no longer redeemable.
What Can Consumers Do?
Flooz customers who paid by credit card should immediately contact their credit card issuer to dispute the charge. One major credit card company has already put a hold on $1 million in Flooz funds to handle disputed charges.
To dispute a charge, consumers should call the customer service number listed on their card and also follow up with a certified, return receipt requested letter setting forth the facts of the dispute. The letter should include account numbers, transaction dates and amounts and any transaction numbers. It doesn't hurt to mention that dispute letters should be brief and factual, not laced with invective and slanderous comments.