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FTC Pushes ‘Stop’ On Free CD Scam

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The Federal Trade Commission put the kibosh on Think All Publishing for alleged deceptive online marketing and billing practices. A US Magistrate judge recommended an injunction against the company to pull the reins on its “Free Software CD” Internet scam, and ordered the company’s assets frozen.

The case illustrates the importance of reading the fine print, especially when it comes to Internet agreements that require credit card information. The FTC alleges that Think All Publishing deceptively advertised free software CDs but billed tens of thousands of customer credit cards for the CDs without authorization.

The defendants’ website said consumers only had to pay between $2 and $3 shipping and handling fees to get the “free” software. Those who signed up for the CD were offered more software CDs for no additional shipping and handling fees.

But the should-have-seen-it-coming truth is buried seven paragraphs down in the fourteen-paragraph terms of use. The terms required customers return two of the four so-called free CDs within 10 days or be charged between $39 and $49.

And that’s not all. New customers were enrolled in a software continuity program to automatically receive more CDs in the mail at the low, low price of $39 to $49 each, unless returned within the 10-day period. Those $2 free CDs eventually could cost hundreds more, if the consumer didn’t take time to read through the entire terms of use.

The FTC alleged in its complaint that most consumers didn’t know about the charges or the continuity plan until they were billed. Customers could not avoid the charges because they were not adequately notified.

Think All Publishing is run by Yuri Mintskovsky, who is charged with unfair and deceptive practices that violate the FTC Act, and the Unordered Merchandise Statute, which prohibits billing recipients for merchandise they did not order.

Consumers wishing to make a complaint about online business practices can fill out an FTC complaint form.

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FTC Pushes ‘Stop’ On Free CD Scam
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