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Scam Watch

December 02, 2007|David Colker

The pitch: "Test and keep this Flat-Screen TV."

The scam: Beware of websites bearing gifts. According to the Federal Trade Commission, FreeGiftWorld.com and SamplePromotionsGroup.com sent e-mails offering "free" televisions, Xbox game machines, laptop computers and other valuable items to lure consumers to the sites. Once there, visitors were told they had to view advertisements before collecting the product.

The charges: The FTC alleged in a lawsuit that more than browsing of ads was involved. Site visitors would be called upon to participate in promotions that required purchasing products, taking out car loans, subscribing to a satellite TV service or applying for multiple credit cards.

The outcome: In a settlement with the FTC filed last week with the U.S. District Court for the Northern District of California, Adteractive Inc. -- the San Francisco company behind the sites -- agreed to disclose to consumers the costs and obligations involved in qualifying for a gift or prize. The company also agreed to pay a $650,000 civil penalty. (One commissioner voted against accepting the settlement, saying the penalty was too low.) The company did not, as part of the settlement, admit to liability for any of the commission's allegations.

Info: The FTC charged that the company violated the CAN-SPAM Act of 2003, which regulates commercial e-mails. Information on that law is available at www.ftc.gov/bcp/conline/pubs/buspubs/ canspam.shtm.

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