FTC hands down sanctions against 'free product' spammer
The agency said this week that it had settled with a spammer who had failed to tell consumers they actually had to spend money to receive "free" products.
MemberSource Media will be required to pay $200,000 in fines, as well as clearly disclose the requirements to qualify for the products or services. The company did business as ConsumerGain.com, PremiumPerks.com, FreeRetailRewards.com, and GreatAmericanGiveaways.com.
Some of the subject lines the company used included "Congratulations. You've won an iPod Video Player" and "Here are 2 free iPod Nanos for You: confirm now," and web ads displayed messages like "CONGRATULATIONS! You Have Been Chosen To Receive a FREE GATEWAY LAPTOP."
In actuality, none of these products were free. Instead, once clicking over to the site they are forced to go through a series of third-party ads. Following that, the consumer needs to purchase items or subscribe to a service in order to "qualify" for the program.
FTC officials said that the failure to disclose these hurdles as well as the deceptive nature of the subject lines of the e-mail were in violation of the CAN-SPAM Act. The commission voted unanimously to impose the sanctions.
As part of the order, MemberSource Media also needs to keep records of their actions so that the FTC can monitor for compliance. The company had no immediate public comment on the decision.
The FTC's ruling was filed with the U.S. District Court for the Northern District of California on Wednesday, and is subject to approval there before it takes effect.