Bankrate Settles Loan-Pitch Suit, Spurring a 5.2% Jump in Shares [Wall Street Journal]
Summary: Bankrate agreed to pay $3 million in order to settle a lawsuit regarding alleged “bait-and-switch” advertisements that were appearing on the Bankrate.com site. Former advertiser American Interbanc Mortgage accused Bankrate of removing its ads from the site after American Interbanc claimed that other advertisers were promoting loan rates that were not honored. Customers who went to those sites were quoted higher rates than appeared in the advertisements, according to the claim. While Bankrate denied the allegations, testimony was presented indicating that Bankrate received hundreds of complaints about those “bait-and-switch” advertisements. Aside from the cash settlement, Bankrate agreed to bring back American Interbanc as an advertiser on the site.
Related Links: Online Content Buyout Candidates Include Bankrate, YouTube • Bankrate.com Sued for Deceptive Online Mortgage Ads • How to Invest in Seniors' Online Spending? • Conference Call Transcript: Bankrate Q2 2006 (August 2, 2006).
Potentially impacted stocks and ETFs: Ameritrade (AMTD), Bank of Internet (BOFI), CheckFree (CKFR), eLoan (EELN), E*trade (ET), Netbank (NTBK), Charles Schwab (SCHW).
Seeking Alpha is not affiliated with the Wall Street Journal