FTC halts deceptive ‘free software’ offer

A U.S. judge has temporarily halted the marketing practices of a Web-based retailer that advertised to send customers free software, then charged them if they did not return some of it.

Since March 2002, Think All Publishing placed ads online promising a free CD containing software for a shipping and handling fee of $1.99 to $2.99, said the U.S. Federal Trade Commission (FTC), which asked for the injunction. The company sent customers four CDs containing software, and billed their credit cards $39 to $49 if they did not return two of the four CDs.

The FTC asked a judge to issue an injunction against the company’s marketing practices and to order the company to repay customers, the agency said in a Thursday press release.

Customers had to agree to terms of use before getting the “free” CDs. Buried in the seventh paragraph of the 14-paragraph, single-spaced document was language that contradicts the free software offer. That paragraph said consumers must send back two of the four “free” CDs within 10 days or be billed.

The document also said consumers would be enrolled in a software continuity program, would receive CDs they didn’t order in the future, and would be charged $39 to $49 for those CDs unless they returned them within 10 days.

In multiple other places, including Think All’s ads and on the liner notes of the software CDs, the software was advertised as free, the FTC said. In many cases, the software included on the CD was open-source software, available as free downloads elsewhere, the FTC said.

The FTC alleged that most consumers did not know about the charges or continuity plan until they were billed. The company, based in Plano, Texas, generated multiple complaints about its business practices, including grievances lodged with the Better Business Bureau of Dallas.

Think All made some changes to its Web site after multiple Better Business Bureau complaints, the organization said. But as of July, Think All continued to “advertise ‘free’ merchandise without clearly and conspicuously disclosing the conditions of the ‘free’ offer,” the Dallas group said on its Web site.

The FTC charged Think All Publishing and owner Yuri Mintskovsky with unfair and deceptive practices and with violating an unordered merchandise statute, prohibiting billing recipients for merchandise they did not order. U.S. Magistrate Judge Don Bush of the U.S. District Court for the Eastern District of Texas issued a preliminary injunction against Think All Jan. 19.

Think All’s Web site was down Friday. There was no telephone listing for the company in Plano.