Ad Company Enters Into Settlement with FTC

The US Federal Trade Commission (FTC) has accused a Web advertiser for sending spam messages with fake subject lines to misguide consumers. The consumers who are tricked by the act are charged with money to access "so called free product".

The online advertiser, Member Source Media, performs its businesses by different names, said FTC on January 30, 2008. The businesses are done by the names PremiumPerks.com, GreatAmericanGiveaways.com, FreeRetailRewards.com and ConsumerGain.com.

The Member Source Media has now finally agreed that it concealed the fact that the users would need to pay for 'free products' and enter into a settlement with the FTC. The norms laid by the FTC said that Member Source Media should disclose all the hidden costs and conditions linked to the products or services advertised. The FTC norm also bar the company to send e-mails which infringe the CAN-SPAM Act (the act that regulates the transactions of unsolicited mails). FTC has also imposed a fine of $200,000 on the advertiser in civil punishment.

The settlement between FTC and Member Source Media has asked to disclose very clearly about the money that a consumer has to spend to opt for a free product or a service in all its advertisements and Websites. The FTC settlement also orders the company to show the list of all additional obligations as per which customer can qualify to opt for the chosen item or service - like while applying for credit cards or purchasing products.

The subject lines of the e-mails sent to lure customers are like "Congratulations. You've won an iPod Video Player", "Second Attempt: Target Gift Card Inside" and "Here are 2 free iPod Nanos for You: confirm now". The Web ads used typical lines like "CONGRATULATIONS! You Have Been Chosen To Receive a FREE GATEWAY LAPTOP."

The Website of Member Source Media leads a consumer via series of third party ads of products and services. If a consumer wants to opt for a "free product" category, he has to go through the Web pages of "optional" offers first. Most of the times, consumers are not eligible to access goods for free until they participate in an additional paid program or settle to subscribe to a service like Netflix.

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» SPAMfighter News - 2/12/2008