This is one of those rare stories in which the bad guys lose, the consumers get their money back, and good precedent is set for the future. Heck, the government is even the good guys in this tale.
Here’s what went down: have you seen those obviously fraudulent ads for ‘free gas for life,’ or something along those lines, and wondered how on Earth they manage to earn a profit? Well, as it turns out, by stealing, essentially. After promising a free book that would help a consumer, according to the Federal Trade Commission’s release, snag free solar panels, and end their dependence on car fuel and electricity, the group would then sign them up for an exorbitantly expensive magazine.
So. Much. Tech.
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How did they get the poor consumer’s credit card? A small shipping and handling fee was required for this physics-beating book to be sent. Once that small payment was made, the FTC claims, another charge would be added, between $29.95, and $89.95. That’s a decent chunk of change.
This sort of activity is called ‘negative-option’ charging, “in which the seller interprets consumers’ silence or inaction as permission to charge them.” Yeah, that shouldn’t be allowed. Do you know what I call negative-option charing? Theft. Anyway, the FTC has come down hard against the group, Green Millionaire (I’m serious), who are now subject to seven-figure fines and repayments. Lying, and stealing, aren’t quite smiled upon, even if you are doing it online.
Now, Kim Dotcom had it all. But the yokels behind Green Millionaire were not exactly living the life. One of those charged in the fraud “has surrendered the proceeds from the sale of his assets, including two parcels of land and a mobile home, and a 2005 BMW.” That’s not a lot of cheddar for so much lying. What’s hilarious about the FTC’s statement is that it makes you want to shout ‘oh, really?’ every few lines. The language is hilarious:
[T]he [FTC’s] order bars the defendants from making any material misrepresentation in the sale of any good or service, including falsely claiming that consumers can get free gas for life, put solar panels on their roofs for free, and make their electricity meter go backward; and from using endorsements and testimonials unless they are true and substantiated.