I’d hate to be the Internet attorney defending this case. The U.S. Federal Trade Commission (FTC) has gone after Internet con artists who engaged in deceptive billing practices, used false celebrity endorsements, and a bunch of other misconduct.
The total haul from this scam is supposed to be around $450 million. Here’s how it worked…
You’d be offered a “free” or low-cost trial of some product. Celebrity names would be used to imply they had endorsed the product.
Of course, once you provided your credit card number to pay for the low cost item or for “shipping and handling,” chances are you’d be getting billed $80 or so each month in unauthorized charges too. And good luck trying to get a refund.
Speaking of refunds, when the FTC sued (PDF file) those involved with this scam, it asked the court to freeze assets so that the victims can at least get some partial compensation. We’ll see how much has already been spent or squirreled away where it can’t be touched.
Want to limit your exposure in these online continuity billing scams?
First, if it sounds too good to be true, it probably is. There’s no such thing as a free lunch. If you’re not paying for something on the front end, chances are you’ll be paying more on the back end.
Second, if you want to risk getting one of these “free” or low-cost items, consider using a pre-paid debit card that isn’t tied to a bank account. For example, pick up a $25 pre-paid Visa/MasterCard/Amex card at your local store so that when you order with it, you won’t be hit with large monthly continuity charges and other unauthorized bogus fees.
Of course, talk over your billing practices with your Internet attorney and merchant account provider too.
Best wishes,
-Mike the Internet attorney
