Published: 05-14-08
World Avenue USA must clearly identify when Web promotions are not ‘free’
AUSTIN – Texas Attorney General Greg Abbott today resolved an enforcement action involving World Avenue USA L.L.C. an online “incentive marketer.” The state alleged that the Florida company unlawfully promised “free gifts” and other similar incentives that were not actually free. According to investigators the defendants enticed customers with free offers but forced them to make purchases in order to obtain the “free” merchandise.
World Avenue USA relied upon e-mail solicitations Internet pop-ups and banner advertisements to market certain goods which it purported to give away for free. Shoppers that accessed World Avenue USA’s numerous Web sites were required to complete lengthy “surveys” that merely exposed them to more offers and advertisements.
To be eligible for the “free gifts” customers were required to complete as many as 18 “sponsor offers” most of which required purchases of goods and services from third-party vendors.
The state took legal action because World Avenue USA failed to disclose the numerous sponsor offers and that most of the sponsor offers required customers to make purchases. Because of the exhaustive chain of third-party sponsor offers including new credit cards or movie rental memberships most consumers left the Web site without reaching the point where they could claim their free gift.
Under today’s settlement World Avenue USA has agreed to develop and implement standards and best practices to ensure that proper disclosures are included in the future. This agreement which will serve as a model for incentive marketers who do business on the Internet comports with the U.S. Federal Trade Commission’s recent enforcement actions against others in the lead generation industry.
In the future when World Avenue USA advertises the word “free” it must clearly disclose if a purchase is required. Also when a purchase is actually required that disclosure must be in close proximity to the word “free” so that customers are adequately informed about costs associated with acquiring the “free” item. The company must disclose how many sponsor offers must be completed to receive the incentive product and that customers have the opportunity to review all available sponsor offers before completing an offer and making a purchase.
World Avenue USA agreed to pay the state $800000 to resolve the claims against it.
Texans who believe they have been deceived similar fraudulent business practices may call the Office of the Attorney General’s toll-free complaint line at (800) 252-8011 or file a complaint online at www.texasattorneygeneral.gov.
