Here's a suggestion...

John....I am not a lawyer, nor do I play one on TV. In MY Humble Opinion....
I would forget about "them" and what they "threaten" to do! Think about YOUR MONEY and how you did NOT receive what you PAID FOR!

In EVERY "Attorney General's Office" of EVERY STATE...there are young lawyers just out of law school who are HUNGRY for "cases like this"...HUNGRY to "do their job"...which is to PROTECT CONSUMERS!

I strongly suggest you CALL the Attorney General's Office at your State Capitol. Explain you situation and ask the operator to put you thru to the Dept that handles YOUR situation (in many offices it's the "Anti-Fraud"Dept)

Now...what happens in MY State (Oregon)...the AG's office sends you some papers. You fill them in...explaining what happened. You then fax or mail these papers back to your contact person.

Now...the person at the AG's office WILL...send a copy of these papers TO the other party. NOW...believe you me...when they receive papers they have to Sign for (The AG's office sends the papers Certified Mail Return Receipt Requested) this gets their little "fraudulent hearts" abeatin' two-forty.

Because the AG's Office ain't no one to fool with.

The MAIN reason people like this CHANGE ADDRESSES is so it is hard for any AG's office to send these papers to them.

Now...as to THEIR "THREAT" of contacting an Attorney and "taking action against YOU". Put yourself in their shoes. I can pretty much guarantee they do NOT have an "Attorney of Retainer" so...they must;
1) Pick up the phone and dial an Attorney
2) Explain their situation and that they would like to bring some kind of "lawsuit" against you.
3) The Attorney then will inform the person on the phone that he has a "SetUp Fee of $500....$1,000...or...(n cases like this where it is apparent that YOU are NOT a "McDonald's and do NOT have deep pockets)...he will say his "retainer" is $5,000. He uses a number like this because for the "work" he is going to have to do for starter's...he WANTS TO BE PAID FOR HIS TIME and he assumes he is NOT going to get any money from YOU.

So...I would NOT let their "threats" of ANY type of "legal action" cause ANY CONCERN!

Now...here's what else you SHOULD DO in this case;
1) Call up your local County Courthouse and ask to speak with someone in the "Small Claims Court" division. When you get connected, ask them 2 things;
1) What is the MAX you can file a cliam for (In Oregon, I think it's now $5,000)
2) HOW do you File a Claim for the Max?

So...if I were you, I'd go ahead and file the MAX. You do NOT need an Attorney. If it comes down to "going to court" don't worry about it...just go to Court on the day assigned...tell the judge what transpired and IF the other side is there in Court (I'd bet a few thousand they don't show)...the judge will ask them their side of the story.

And...if you are "awarded a Judgement in YOUR favor"...you go immediately to the Clerk who is in the Court and ask;
HOW to "place a BRICK" on their Bank Account! Which means, the Court will issue a Formal Document to their Bank...LOCKING UP THE ACCOUNT UNTIL YOU ARE SATISFIED!

So...get a copy of any checks you gave them and see if you can determine WHICH BANK they used to deposit your checks.

Now...this may take some time BUT...YOU HAVE THE UPPER HAND HERE! It was YOU who did NOT receive what you paid for. Their threat of "losing business because of YOUR statements" is LAUGHABLE...and shows how they THINK they can "intimidate YOU" and get YOU to "get off their case"!

Horse-Hockey! YOU GO AFTER THESE SCOUNDRELS! YOU have EVERY RIGHT to attempt to get YOUR MONEY BACK!!!!

Now...one more thing;
Since these people are "playing" in the realm of the Internet and "Websites" they have a "server company" which they are paying to hold these sites. CONTACT THE SERVER COMPANY and tell them you were RIPPED and YOU ARE GOING TO THE ATTORNEY GENERAL'S OFFICE OF YOUR STATE...AND IF THEY WANT TO BE DRAWN INTO AN INVESTIGATION OF THESE SUBJECT PEOPLE...THEY...THE SERVER COMPANY (or even the Dial-Up or Internet Connection Company that lets them get OnLine) SHOULD CONSIDER DOING SOMETHING ABOUT BEING INVOLVED WITH THESE PEOPLE ANY FURTHER.

Now...I have had instances where their server co took them Off Line INSTANTLY.

SO...you have some avenues to pursue...and if I were you I would use ALL of the above to try and get my money back. My goodness man, a $50 Wed Editor and a dialup account can get you a website and...there are people in your town that your dialup company knows who can put up a beautiful website for peanuts.

OK...OK...I know...THEY "sold you" on the fact that THEY had a website that could bring YOU a lot of moolah! Poppycock.

GO GET YOUR MONEY!...and take your wife or girlfriend on a vacation to the Bahamas for a couple of weeks.

Again...the above is just "my opinion"...I am NOT an Attorney.