A software vendor offered “free” CDs to consumers for the cost of shipping and handling ($1.99 to 2.99). However, the fine print required the consumers to return half of the CDs within 10 days or their credit cards would be charged $39 to $49.

The feds stepped in and obtained a temporary injunction in federal district court.

There is apparently no working phone number for this “business” and the website is currently down. 

Note that this type of conduct typically gives rise to claims under state deceptive trade practice laws where remedies can include treble damages, punitive damages, attorney fees, etc.

Moral of the story… 

Don’t play cute with the consumer. Even if they love your product or service, no one appreciates being deceived. 

This applies to more than software. If you’re selling widgets with “free” XX, there shouldn’t be hidden charges or penalties unless you enjoy paying lawyers to fight the Federal Trade Commission, your state’s Attorney General, and/or a plaintiff’s lawyer that wants to buy a vacation home using the money he will earn suing you on behalf of consumers.

Hat tip to the Dallas Morning News.

About the Author

With an advanced international law degree from Georgetown University and more than 14 years of real world legal experience, Attorney Mike Young shows entrepreneurs how to protect and grow their businesses online. He's the author of "Internet Marketing Legal Secrets Revealed," "How to Create Your Own Internet Business Without a Lawyer for Under $175," and the creator of Website Legal Forms Generator^TM. Not just a lawyer who focuses exclusively on Internet and marketing law, Mike’s been working with computers for more than 27 years (his first computer was an Atari 400 with 8 KiB RAM) and started representing Internet businesses back in 1996.