E-marketing company Hula Direct has filed a lawsuit against online advertising provider Red McCombs Media. The complaint, filed last week in the U.S. District court of Waco, Texas alleges that Red McCombs only paid $41,247.37 for $226,031.61 worth of advertising on sites operated by Hula Direct. Hula Direct wants Red McCombs to pay the difference, $184,784.24, plus interest and court costs, citing breach of contract and fraud.
According to the complaint, in mid-2005, Red McCombs signed a contract with Hula Direct to purchase online advertising space. After the contract’s agreed upon expiration date, Hula Direct says they continued to provide advertising to Red McCombs under the previous agreement. They claim that Red McCombs Media said they would purchase advertising all the way through November 2006.
According to Red McCombs CFO/COO Aaron Welch, Red McCombs Media will file a countersuit. “We will be counter suing, because they provided fraudulent traffic, of which we have proof,” he tells ADOTAS. “They signed our publisher agreement, and it says that if you commit any fraud, A, we don’t pay you anything, and B, you owe us at least ten thousand dollars per instance. One of their claims to us was that we contracted them to run traffic on their websites … we served as a publisher for them, and on more than one occasion they gave us our own advertising campaign back.”
“We’ll be winning. It’ll be quick,” he adds.
Hula Direct refused to comment further than what was stated in the complaint.