‘But I’m Not the Only One …’
Isn’t a Legal Defense
How many of you have been pulled over for
speeding just moments after a fast, expensive
sports car (driven by a good-looking guy who
still has all his hair) has passed you like you
were standing still? Did you tell the officer who stopped you
about the guy in the sports car, and complain about how unfair it was that you got pulled over and he didn’t? Did it do
you any good? I didn’t think so.
If “Family Feud” had a category titled “Excuses that
direct response advertisers give to their lawyers when they
don’t play by the rules,” the No. 1 answer would be, “But all
my competitors do that!” Talk to the hand, folks, because
the judge isn’t listening.
One popular marketing technique that is often misused
is the “free” offer. Economists are fond of saying that there is
no such thing as a free lunch, and most of them would probably say there’s no such thing as a truly free DR offer.
A federal judge recently approved a consent order settling the Federal Trade Commission’s (FTC) allegations
that Think All Publishing was guilty of a deceptive “free”
offer. According to the FTC, the defendants’ Web site offered consumers a free CD containing computer software if
they agreed to pay a shipping-and-handling fee of $1.99 to
$2.99. Literal-minded people may believe that “free” should
mean “free” — but the government usually lets you get away
with attaching strings (like a shipp ing-and-handling fee) to
“free” offers as long as you disclose them.
Here, the small shipping-and-handling fee wasn’t the
only string attached to this offer. Consumers who ordered
the free CD were then offered three more “free” software
CDs with no additional shipping or handling. Before they
accepted the offer, they had to check a box saying they had
But many consumers checked the box without clicking
them cast the first stone).
Those consumers who
did click on the “Terms
of Use” link found what
appeared to be legal boilerplate relating to
By Gary D. Hailey and
Jeffrey D. Knowles
arrangements and usage rules. Only if you read as far as the
seventh paragraph of the lengthy document (which was single-spaced and printed in nine-point font) would you learn
that the seller’s definition of “free” was a little funky.
In fact, customers who didn’t send back two of the four
“free” CDs within 10 days were charged $39 to $49, according to the complaint. They also were enrolled in a software
continuity program, and were charged $39 to $49 for additional CDs unless they returned them within 10 days. Not
surprisingly, a lot of customers complained when they got
their credit card statements and discovered they had been
The settlement contains nothing that comes as a real
surprise. It bars the defendants from misrepresenting that
items are “free” when they aren’t. It requires that the defendants disclose all the material terms and conditions of
any negative-option offer. It bars the defendants from charging consumers for products or services without their consent. Finally, the defendants were ordered to pay more than
$2 million in consumer redress.
If you want to call something “free,” you need to disclose
all the hidden strings attached to that offer. You’d better
put that disclosure in close proximity to the “free” claim and
make it unavoidable — not bury it in the seventh paragraph
of a lengthy single-spaced document that has a misleading
title and requires consumers to click on a link to get to it.
But if you choose to ignore that advice and take
your chances with the FTC, we ask only one
thing of you: please … please … don’t call us
and complain that everyone else is doing
the same thing and getting away