April 20, 2012 at 7:38 AM ET
The Federal Trade Commission just shut down a marketing operation that allegedly tricked people into signing up for subscriptions to an online magazine. In its complaint, the FTC says the lure was a supposedly “free” book that falsely promised to explain how to “get free gas for life.”
The “Green Millionaire Book” also promised to show people “how to put solar panels on your roof for free” and how to “make your electricity meter go backwards paying you.”
The television ads, which ran from September 2009 through November of 2010, said over and over again that the book was “free.”
“The word ‘free’ was on the screen for a lot of the commercial in large white letters with exclamation points,” says FTC attorney Carmen Christopher. “And the author, Nigel Williams, who was in the commercials said the book was ‘free.’ ”
To order the book, people had to go to the company’s website which said: “GET YOUR FREE BOOK TODAY!” They were required to provide their credit card or bank account number to pay for a $1.95 shipping and handling fee.
In its lawsuit, the Federal Trade Commission says people who ordered the Green Millionaire Book were billed for an online magazine subscription they didn’t want and never knowingly agreed to. The cost of the subscription was either $29.95 for a two months subscription or $89.95 for one year.
(Read: FTC News Release)
The federal complaint says the company broke the law by not clearly disclosing the automatic subscription and how to cancel it to avoid being charged.
The Green Millionaire website did have some disclaimers about the costs associated with the book, but FTC attorney Christopher says they were “pretty well hidden” from the consumer.
“It would have to be a pretty savvy person to realize that there would be additional charges,” she says.
The FTC also alleges the testimonials used in the TV commercials, such as “I don’t pay for electricity,” “I don’t have car payments,” and “I don’t pay for fuel,” were phony.
In settling the FTC complaint, Green Millionaire, LLC of Los Angeles agreed to pay almost $2 million in refunds to victims. Most customers should get checks for about half the amount they paid.
The bottom line
I’ve warned you about “free” offers and the risk you take anytime they want your credit or debit card number. (Read: Con artist took in $359 million with bogus 'free-trial' offers)
This is an ongoing problem. That’s why I steer clear of such offers. It’s simply not worth the risk. If you want to give me a free sample – give it to me for FREE.
An FTC video, Free Trial Offers tells how to check out a free trial before you sign up, and what to do if you are charged for merchandise you don't want and didn't order. For more information on free trials, read "Free Trials" Aren't Always Free.