Tom Krause, NOSSCR Litigation Director

NOSSCR has filed a lawsuit against Kapital Media Productions S.L., the Spanish company behind the website La Grada Online, alleging that the website published false and misleading articles about Social Security benefits. The lawsuit, filed on October 18, 2024, in the United States District Court for the Northern District of Illinois, claims that these articles caused 140,000 unnecessary calls to SSA in one day, resulting in significant harm to NOSSCR members and the Social Security Administration (SSA).

In the lawsuit, NOSSCR asserts that its members, including over 200 in Illinois alone, frequently interact with SSA, often multiple times daily, via phone and other means. They rely heavily on SSA’s national teleservice system to manage benefit claims and payments.

Kapital Media Productions S.L., based in Terrassa, Spain, specializes in television programming, broadcasting, and internet activities. It operates La Grada, a sports news platform primarily focused on RCD Espanyol, a Barcelona-based football (soccer) club. La Grada Online, however, purports to be a source of American news, including sports and financial updates and features links to sensationalized topics like Social Security updates.

Understanding ‘Pay-Per-Click’ Advertising

The lawsuit touches upon the concept of “pay-per-click” (PPC) advertising, a common online advertising model. In PPC, advertisers pay a fee each time one of their ads is clicked. Websites that host these ads earn revenue based on the number of clicks they generate. This model incentivizes websites to attract as many clicks as possible, sometimes leading to misleading or sensationalized content. NOSSCR argues that Kapital exploited this model by publishing false information about Social Security benefits to drive traffic to its website and increase its advertising revenue.

The Complaint

The complaint centers on several articles published by La Grada Online. One article, published on May 31, 2024, falsely claimed a $600 extra payment would be issued to Social Security beneficiaries over 62 in June due to a cost-of-living adjustment (COLA). SSA confirmed no such payment existed. On June 3, 2024, SSA Commissioner Martin O’Malley reported a surge of 140,000 calls to SSA’s 800 number, attributing the increase to this “bogus news story.” SSA’s Office of Inspector General (OIG) subsequently issued a statement debunking the false claim and reiterating that COLA increases occur in January, not June.

Another article, published on August 9, 2024, falsely announced a “Social Security Benefit Boost” and “Extra Payment” for retirees on August 30. While the article later admitted this was not an extra payment but an advance, no such boost or payment occurred. According to NOSSCR, these articles led to increased call volumes to SSA, causing significant delays and cost to NOSSCR members in terms of time and money.

NOSSCR alleges that Kapital intentionally included false and misleading information in its articles to drive website traffic and increase advertising revenue. This practice, often called “clickbait,” aims to attract readers with sensationalized headlines, regardless of accuracy. The lawsuit highlights a Forbes article that identified La Grada as a “content farm” that uses such tactics to maximize ad revenue.

Legal Claims and Attorneys Involved

NOSSCR’s complaint asserts three main claims:

• Civil RICO: NOSSCR alleges that Kapital engaged in a pattern of racketeering activity, including wire fraud, by disseminating false information through its website.

• Lanham Act Violation: NOSSCR claims that Kapital made false or misleading statements in commercial advertisements, causing injury to NOSSCR and its members.

• Illinois Fraud: NOSSCR alleges that Kapital knowingly made false statements with the intent to induce reliance, resulting in damages to NOSSCR members in Illinois.

The attorneys representing NOSSCR in this case are David D. Camp, NOSSCR CEO; Tom Krause, NOSSCR Litigation Director; and Meredith Marcus, NOSSCR Board Member at Osterhout Berger Daley.

This lawsuit raises important questions about the responsibility of online news sources to publish accurate information and the impact of misleading content on vulnerable populations. The outcome of this case could have significant implications for the online news industry and the fight against misinformation.