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Texas AG Ends Investigation Into World Avenue

Written on
May 15th 2008
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by Kathleen  |
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ADOTAS – Todays announcement of a settlement between The Texas AG and World Avenue USA, LLC has some interesting implications for the promotions industry. World Avenue USA, LLC, has entered into a voluntary agreement with the Texas Attorney General’s office that shuts the book on the investigation into the wording of the company’s ads. However, the decision has some impact on the definition of “free” for interactive advertisers involved in promotions.

The civil probe dates back to May of 2006 — it focused on the usage of the word “free” and how exactly it pertained to consumers’ receipt and retention of goods. After a lengthy review, the Attorney General determined that the company had not violated any laws, rules or regulations – and in the process set a new precedent for an entire industry.

According to Texas Attorney General Greg Abbott, World Avenue promised consumers “free gifts” and other similar incentives that were not actually free. In short, investigators found that the company asked consumers to make purchases through third-party sponsors in order to obtain the “free” merchandise. This concept has been a point of conflict in the promotions industry on exactly what does “free” mean.

In the future, when World Avenue advertisers employ the word “free,” they must 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 and several other promotions companies claim to have implemented these types of practices for a long time.

However, if the only thing a consumer must pay for is shipping and handling – the product is still considered “free” – which is a landmark decision in the promotional world.

As part of the agreement, World Avenue agreed to pay $800,000 to cover the costs of the investigation against it and will work with the AG’s office to further define standards and best practices for the online advertising industry, the company said in a released statement. “The Internet has, for years, been somewhat uncharted territory,” the company noted. “We believe that the further definition we have been able to give to our industry as a result of our work with both the Florida and Texas AG’s offices positions World Avenue to take a leadership position in helping branded advertisers navigate the new frontiers of online advertising.”

In January, the Office of the Attorney General in Florida dropped its suit against World Avenue and closed the case.



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Reader Comments.

Isn’t this publication owned by World Avenue or you both have the same investor? Niu Niu

Posted by theuseful | 3:41 pm on May 15, 2008.

Adotas and it’s parent company New York Publishing Group, Inc. are not owned, affiliated or operated in any way by World Avenue or any associated company of World Avenue and Niu Niu Ji. There’s no relationship.

> Editor., Adotas

Posted by Bob | 10:59 am on May 16, 2008.

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