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Free Gift Advertiser Settles With FTC
David Utter
Staff Writer
2007-11-29
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The Federal Trade Commission won a settlement with Adteractive over its free gift online promotions that actually required people to pay money or participate in other promotions to be eligible.
 | | Free Gift Advertiser Settles With FTC |  |
Adteractive will be out $650,000, the civil penalty they will have to pay as part of a settlement with the FTC over their business practices. Sites run by the company, like FreeGiftWorld.com and SamplePromotionsGroup.com, used spam and banner advertisements to attract people to their promotions.
These promotions offered free gifts to participants. Gifts offered included computers, televisions, and video game consoles.
However, the free offers compelled people to sift through numerous ads and "do such things as purchase products, take out a car loan, subscribe to satellite television service, or apply for multiple credit cards," the FTC said in a statement.
Paying or engaging in other activities to obtain a free gift proved to be material facts Adteractive withheld from consumers. The FTC also dinged the company over its deceptive email subject lines, which they called a violation of the CAN-SPAM Act.
The settlement required Adteractive to disclose requirements to obtain free gifts clearly and conspicuously for consumers. They will have to keep records for FTC compliance monitoring purposes.
FTC Commissioner Jon Leibowitz had misgivings about the terms of the settlement, dissenting from the other four FTC voters who approved the deal. Leibowitz called the $650,000 civil penalty a "downward departure" from other cases, and said it would be inadequate in deterring future violations.
About the Author:
David Utter is a business and technology writer for SecurityProNews and WebProNews.
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