• by Wendy Davis  @wendyndavis, May 29, 2008

A computer tutor in San Diego who purchased pay-per-click ads through IAC's local listings site, Citysearch.com, has sued the company for click fraud, alleging it charged him for clicks made by Web users other than potential customers.

"Although Citysearch represents to its customers that it has a system in place to prevent click-through fraud and to ensure that advertisers are not charged for 'invalid clicks,' it has failed to take any significant measures to track or prevent click-through fraud, and fails to adequately warn its existing and potential customers about the existence, and prevalence, of click fraud," the lawsuit alleges.

The case was brought by Tom Lambotte, who runs theSanDiegoMacTutor.com. Lambotte, who began buying ads from Citysearch last December, alleges that the ads drew only nine clicks--including one by him and one by a client--during the first 15 days they ran.

On day 16, the day after Christmas, Lambotte attempted to cancel the account, but the ads continued to run for five more days, during which time they were clicked on 69 times. It's those 69 clicks--which Lambotte characterizes as a "sudden and unexplained influx"--that he alleges are invalid. It's not yet clear whether those clicks were the result of ads on Citysearch.com or on another site within IAC or a company partner.

Eric Goldman, director of the High Tech Law Institute at Santa Clara University, posited an explanation other than fraud for the extra clicks. "It seems possible that a bunch of potential customers got shiny new Apple toys for Christmas and then looked for someone to help install them," he wrote on his blog.

Lambotte said in his lawsuit that he asked Citysearch to refund his fees for those post-Christmas clicks, but the company refused. He is seeking to represent a class of thousands of other Citysearch advertisers.

Lambotte's lawyer, Brian Kabateck of Kabateck Brown Kellner, has previously obtained click fraud settlements from Google and Yahoo in separate cases. Kabateck also recently filed a lawsuit against Google in which a search marketer alleged that Google tricked him into paying for AdSense ads on the company's publisher network, when he only wanted to purchase ads that would appear on search results pages.

Citysearch said the lawsuit is meritless and it intends to "defend against it vigorously."

"Citysearch actively enforces a strict click fraud policy, with advanced processes and technology in place to identify invalid click activity affecting our customers' advertising. We continually monitor and analyze click activity to ensure that our customers' advertising dollars are well spent on the generation of high-quality leads," the company stated.