'Free Software' Scammers Fined $2.2 Million
from the this-is-not-the-'free'-business-model-we're-talking-about dept
We've seen various incarnations of the scam (often found in infomercials) where a company offers you something for "free," but in the fine print, you're really signing up for an ongoing paid service. For years, some of the biggest "ringtone" companies made much of their money this way, offering "free" or cheap ringtones that actually involved the user signing up for a monthly service without realizing it. The infamous "Video Professor" has been accused of running a similar system, though the company vehemently denies this.Either way, it appears that the FTC is starting to crack down on some of these practices, fining a competitor to "Video Professor," called ThinkAll, $2.2 million. Apparently ThinkAll took this scam to a new level. It offered "free" software, where you simply had to pay for the shipping and handling -- though, it sounds like that was really just so the company could get your credit card on file. After receiving that first free CD, customers were offered 3 more titles totally free (not even any shipping). If you decided to accept that software (and why wouldn't you?) it made you check a box saying you had read the terms of service. Of course no one reads the full terms of service, which include (hidden down in the 7th paragraph) the fact that in accepting this "free" software, you're actually agreeing to sign up for a monthly fee-based service. Quite sneaky... until the FTC stepped in. Hopefully other businesses take notice and start avoiding these types of scams.
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Filed Under: fine, fine print, free software, ftc, scam, terms of service
Companies: thinkall
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What?!
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Re: What?!
Sympathy is for LOSERS.
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Re: Re: Re: What?!
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Re: What?!
Yes, the TOS was poorly laid out and hard to read; that's probably a violation. But frankly, that should have been a clue that something was up. I don't know how anyone gets old enough to obtain a checking account without acquiring at least that much common sense.
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Find sympathy in between shit & syphilis in dictionary
Are gullible people unworthy of protection? Of course they need protection! It's the gullible people who don't read terms who are unworthy!
If you "need a months worth of reading & analyzing to even find & understand these words", THEN DON'T CHECK THE BOX SAYING YOU *AGREE* TO THE TERMS!!! (You do understand that part, don't you... that you are AGREEING to THEIR terms? You didn't need a month to understand that much, did you?)
As for those who (really quite stupidly) hand over their credit card info (clearly they also neglected to read the terms of their credit card application too), how many times do they need to get ripped off before they seek a different way of making the first few payments until it can be determined whether or not the company is trustworthy?
USE YOUR HEAD PEOPLE... ask for an address so you can send a money order or a cheque / check by snail-mail instead. If the company doesn't want to accept payment that way then be suspicious (after all, are credit card holders the only ones allowed in on the "deal"?)
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Re: What?!
When in doubt, READ THE FUCKING CONTRACT. That's what it's there for. If you are old and (I would hope) smart enough to sign your name, then you're smart enough to read, process and understand what you're signing. If not, then, as Jake said, you kinda deserve what happens to you.
It's shit like this... People blindly signing away on little pieces of paper... that have caused first the housing crisis (no verifiable income? Not a citizen? No credit? Shitty credit? Hey, YOU TOO can own a $250k home with nothing down!), and now the looming credit crisis. Nobody bothers to read the contracts that they're entering into, and nobody notices until they start receiving the phone calls throughout the day hounding them for the money that they owe.
Hello? Is this thing on? (tap tap tap) CORPORATE AMERICA IS COUNTING ON YOUR IGNORANCE. CORPORATE AMERICA IS OUT TO GET YOU, AND THEY KNOW THAT YOU DON'T READ THE FINE PRINT.
They covered their asses by putting it in the contract, knowing full right well that Joe D. American is too lazy/stupid/gullible to read it. AND they know that if Joe D. American (or his wife Jane D. American or their friend LaQuandrashel D. American; part of being equal is owning up to your own shortcomings and mistakes!) actually took the time to READ the terms and conditions, then few people would sign.
Take responsibility for your own actions, quit crying and expecting the Gummint to come to your rescue. Hell, they outsourced writing the laws to the corporations!
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Deceptive?
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Dirty Underhanded Business Practices
In order for you to get your 30 day supply of this product, you had to agree to an "automatic enrollment" with this company, which locked you into an agreement (if you didn't fully read and understand just what you were getting yourself into) that left the victims (did I say that word again?? I meant customers, [sarcasm of course] trying to cancel their "enrollment" with this company, who kept on charging the people's credit cards and checking accounts for quite some time, even when they requested to stop the business relationship completely. This is what lead to a lawsuit and the company had to temporarily stop selling the product. But, now they're back in business, and still in commercials.
Before I go any further with this story, I'll let you know what I'm talking about. All I have to say is 6 little words, and you'll know what the product is. How about "Hey, it's our good friend Bob"! at the start of the commercial. That commercial pis*ed me off each and every time it came on, I wanted to throw the remote at the TV. No matter what channel I'm watching, it's on at least 20 times in the evening. It's almost like they're thinking that men in this region of the country have a penis problem, and NEED these pills in order to survive. What a crock of...well, you get the idea.
A business that treats their customers well, will survive in the end, compared to these "fly-by-night" companies that spring up out of nowhere, make all the money they can, and then leave town, leaving the victims scratching their heads wondering how to get their money back because the automatic enrollment had print so fine, that even the best microscope can't make out the words.
It's a sad, sad world we live in. (sigh)
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Stupid or not...
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Any more clues?
Or spell it out for us?
BTW: these companies are fraudulent scumbags and the owners deserve to have all their money taken away and be locked up.
Obviously they are trying to rip people off by hiding the automatic renewal hidden in the fine print and expecting the victim not to notice.
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Victims of fraud re: post by anne
How is he different from "man who gets suckered into buying 'free software'" other than the product he was promised?
Are gullible people unworthy of protection? Maybe they're objects of derision to some, but what about the scammers who suckered both?
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internet scammers or just all scammers
Get that shit on Pay Per View and I will sign up for every damned huckster that loses his head ($40.00 per head would be a reasonable price).
I would even pay higher fees for corporate execs who let pensions be robbed on their watch ($100.00 per head).
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Re: internet scammers or just all scammers
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These companies should be force into chapter 11 bankruptcy with 100% of their worth and revenue being divided evenly among all victims/customers
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Well Stupid!
I say; don't read the details then don't bitch if you get screwed! That'll teach ya!
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It was a vitamin (B) free month supply offer through Men's Health magazine in the early 90s. I pulled the coupon and sent it off, I did not provide any CC or pay any shipping. A few weeks later, my month supply of vitamins came. Cool, and never gave it a second thought.
Problem was, next month, a new month's supply came, then after that another month's supply and I never agreed upon accepting anything other than the free month. About 7-8 months later, they stopped sending them, but of course then letters from a collection agency started... I was in the army, they were shipping to a APO box #, I told them I had no idea who they were calling in reference to. Back then I had no idea what credit reports were about, but I never supplied anything but an address. So I guess I was smart in that aspect.
Luckily for me, my scammer was dumb. Never had to pay for those vitamins, didn't really trust them enough to use them either though.... so I guess no one won.
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There is a Simple Solution
You create a number for the exact amount of the transaction and allow the number to only live for 2 months. When the merchant has charged your card for what you agreed to purchase, then cancel the number. Don't cancel right after placing the order because that's fraud and that makes you the bad guy.
I had an ongoing problem with XM Radio when they attempted to bill my canceled card number for another year's subscription. When they couldn't bill it, the actually turned me over to a collection agency called CCA! That company repeatedly made calls to me demanding I pay up. When I wrote to XM and CCA demanding they stop and threatening legal action, the calls and collection efforts stopped. I asked them to explain how they thought putting a customer with a declined credit card into collections was good customer service.
Can you hear the crickets chirping?
Cancel your existing credit card and get one with this type of service. For online transactions, it's the best weapon a consumer has.
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Yes there are free services, but...
The best example of this is the freecreditreport.com commercials: they're the company that offers free credit reports with (some service that they would say in a really fast whisper). After some "persuasion" by the government, the commercial finally says "offer good with enrollment in Triple Advantage".
What's Triple Advantage? They don't say on the commercial, but I've heard it's $39.95 a month until you cancel.
And yes, you can get your credit report for free if you do your research: all of the credit agencies offer a free report once a year.
The warning sign is when someone asks you for your credit card for a free item. Free is free: they shouldn't need to charge your card for a "processing fee" (or whatever they call it).
Yet people seem to ignore this obvious sign. The big question is whether the government should step in and protect these people.
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Computer Does All the Work For You
Future fodder for TechDirt.
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Basically, if it seems to good to be true, then it probably is. http://www.custompcmax.com
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TechDirt is always looking at new business models, new ways of doing business online, new ways of handling intellectual property. How about we start looking at new ways of issuing TOS? There could be a sort of Creative Commons TOS, a boilerplate all companies could use and all consumers could feel confident about.
It should also be mentioned that it's not just companies offering free goods that pull these scams. Any of you ever tried Intelius? The place offers a legitimate service -- information retrieval -- but adds a spurious "survey" scam onto it using completely deceptive terms.
http://www.techcrunch.com/2008/05/29/naveen-jains-intelius-prepares-to-go-public-how-much-of-the ir-revenue-is-a-scam/
I'll bet any number of the technologically sophisticated people who read TechDirt could fall for this scam.
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I have only little sympathy
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