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SubscriberBASE To Pay $2M in Online Fraud Case

Written on
May 13th 2008
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by Kathleen  |
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moneymouth.jpgADOTAS – Wanna free TV? It’s high-def! C’mon, everyone likes freebies! Except when they have to be paid for and they never appear – that kinda defeats the purpose. Recently, more than 35,000 Washington State residents became eligible for refunds (some well into the thousands of dollars range) from two online companies that advertised freebies, but required payments for trial offers before they would “qualify” for the free products.

SubscriberBASE Holdings, Inc. and SubscriberBASE, Inc. are no longer allowed to offer promos to Washington residents, the state Attorney General’s office reports and they are being forced to cough up more than $2 million to boot.

“There’s a reason why folks say ‘there’s no such thing as a free lunch,’” said Attorney General Rob McKenna, in a news release. “SubscriberBASE offered ‘free’ items such as high-definition televisions, digital cameras and laptops, but consumers had to pay more than the items were worth in order to receive them. We alleged SubscriberBASE misled consumers into believing that they would be shipped ‘free’ items worth thousands of dollars, but they first had to provide personal information which the defendants then leased to other online marketers. Consumers were then presented with a series of offers that required increasingly more expensive purchases in order to qualify for the ‘free’ item. The vast majority dropped out of the qualification process, but only after they had spent significant money.”

The companies settled with the Attorney General’s Office and must pay $55,000 in civil penalties and more than $69,000 in legal fees, plus about $2 million in refunds to customers, depending on the number of consumers who respond to the refund offer. Though SubsciberBASE did not come out and overtly admit wrongdoing, by agreeing to the terms of the settlement they tacitly did.

In addition to issuing the bait-and-switch promos, SubscriberBASE allegedly collected personal information about customers that it sold to other marketers, according to the complaint. “The information becomes part of a database of more than thirty-two million of consumers that is rented by Defendants and characterized in their advertising to potential purchasers as a list of ‘ideal candidates for promotional offers, trial offers, and subscriptions,” the complaint states.

“The companies’ main intent was to collect and sell consumers’ personal information to marketers. Under our settlement, the defendants can no longer advertise ‘free’ gift promotions to Washington residents and cannot use, sell or lease the personal information of Washington consumers in its databases,” McKenna said.

As part of their settlement, SubscriberBASE has e-mailed messages and sent letters to consumers who paid for their “freebies” in Washington, the Attorney General’s Office said.



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Reader Comments.

Good! SubscriberBASE has been scamming consumers and affilates for years!

Posted by Jon | 12:25 pm on May 13, 2008.

The author did a good job of sensationalizing this extremely modest settlement. The company has posted a press release on their website at: http://subscriberbase.com/pressrelease043008.html

Posted by Michelle Hamel | 2:06 pm on May 13, 2008.

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