'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.

Filed Under: fine, fine print, free software, ftc, scam, terms of service
Companies: thinkall