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SEATTLE – A Washington-based company that sells search engine optimization (SEO) services to small businesses is prohibited from selling or advertising them to new customers under the terms of a settlement announced by Washington State Attorney General Rob McKenna.

While the SEO standards debate rages, the search marketing industry continues to be perceived as purveyors of snake oil and predators of small business owners.

SEOMoz honcho Rand Fiskin denies that SEO standards are needed while raging against Internet Advancement to no avail for more than two years:

“All in all, this is one of the most despicable players I’ve seen in the spam/scam SEO game. It disgusts me to think of the thousands of dollars companies are paying every day to these clowns to get services that carry no business or marketing value whatsoever. These guys are going on my big time sh-t list.”

That was in February, 2006 before hundreds of additional complaints were filed against SEOMOz competitor, Internet Advancement.

Under the agreement filed in King County Superior Court, Internet Advancement must allow its customers to exit existing contracts. The SEO firm’s Web site is still online so advertising apparently doesn’t include a Web presence.

So will the lawsuit put the SEO firm out-of-business?

Amazingly, no.

The agreement allows Internet Advancement to offer search-engine optimization services to existing customers. The company may provide Web site design services to new customers, as well, provided such services don’t include the creation of metatags or keywords or submission to search engines.

The agreement states that Internet Advancement cannot:

* Advertise or offer search optimization (SEO) services to new customers;

* Misrepresent its success rate, ability to provide top search-engine rankings or increase Web traffic or its number of repeat customers;

* Fail to disclose all material contract terms before customers have agreed to pay for services;

* Fail to respond promptly to consumer complaints, refund requests or other requests for services or information;

* Charge customer credit cards without authorization;

* Fail to process requests to cancel service or bill consumers after they have cancelled contracts;

* Represent that a customer isn’t entitled to a refund because the customer performed changes to the source code of his/her Web site unless a third-party technical expert confirms that the changes were made or authorized by the customer.

More astonishing: Google, Yahoo, MSN , AOL and Ask have allowed their logos to be used on the Internet Advancement Web site.

Internet Advancement of Redmond, which also does business as 4GreatBuys.com, was accused of misrepresenting its ability to provide top search engine rankings and increase Web traffic, even after being sued by Washington State.

The defendants admitted that some of the violations had occurred and agreed to the new settlement filed today in King County Superior Court, but denied that all of the alleged violations were part of a repeated pattern. They will pay a $118,386 civil penalty and $35,959 in attorneys’ fees. The defendants also agreed to comply with a lengthy list of injunctive provisions or else be slapped with an additional $450,000 penalty.

According to today’s settlement, Internet Advancement guaranteed that a customer’s Web site will appear within the first 25 links on major search engines, such as Google, Yahoo and AOL, when Internet users search for specific keywords.

Customers paid $999-$3,000 in “set-up” fees and a $149 monthly fee.

Small businesses filed 82 complaints about Internet Advancement with the Attorney General’s Office between Oct. 28, 2004, and March 10, 2008. The Federal Trade Commission and Better Business Bureau also received complaints.

All righty then.

REFUND REQUESTS
Internet Advancement agreed to a refund program. Customers eligible for refunds fall into three categories:

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