The Checkout

"Free" May Just Be Another Word for "Fee"

We all know there's no such thing as a free lunch. But, clearly, many consumers still believe "free trial offers" and "free shopping sprees" are also free. Usually, they're not.

In the past week, I've received two alerts that underscore this point. They involve consumers complaining about unauthorized charges on their phone bills, credit cards or bank accounts. Turns out those charges were probably incurred when the consumers signed up for those delicious, too-good-to-pass-up "free" offers.

Case One: Florida's Attorney General Charlie Crist announced he is investigating a rash of phony $12.95 charges on telephone bills for an Internet shopping service, Email Discount Network. The charges were found on phone bills sent to BellSouth, Sprint, Verizon, AT&T and SBC Communications customers. "These secret charges were placed on bills in hopes that no one would notice," said Crist in a press release. "In this case, someone did notice. and we will investigate it fully."

I called the Florida-based Email Discount Network to find out how these charges could have occurred. Supervisor Kristine Morales patiently explained that most consumers who were charged had agreed to take a survey--for a chance of winning a $1,000 online shopping spree. In the terms and conditions of the survey (which I think most consumers probably never read), there is a $12.95 nonrefundable initial fee, imposed after a 72-hour trial period, unless the consumer drops out and notifies the company by e-mail before then. Then, there's a $14.95 monthly fee for the online shopping service.

Email Discount Network attorney Sean Moynihan added that the company clearly displays its terms and conditions when customers sign up. "If someone chooses to ignore the disclaimers, it's not fair to beat up the company over that," he said. He added that the company "has an extremely low level of complaints;" refunds were granted after complaints were investigated.

Case Two: Consumer Action, a California public-advocacy group issued an alert about a Canadian firm that is selling a free trial of its teeth-whitening products, only to make $106.90 withdrawals from bank accounts of people who ordered the free sample over the Internet. The group said it has received many complaints about "WhiteOvernite. "

Joe Gioeli of WhiteOvernight, said customers need to read the Web site carefully. It says "*Free Treatment," which is not the same thing as "free offer," Gioeli said. "There's nothing free about it, meaning you're going to get something for free. It's an introductory offer" that gives you one free treatment (plus $3.95 for shipping and handling). Consumers need to read the terms and conditions carefully, he said. If they do, they'll note that the asterisk before "free treatment" leads you to the terms saying you will be billed $89.95 plus $16.95 for shipping unless you cancel within 14 days. In fact, if consumers read all the fine print of the terms and conditions, they'll also see: "NOT A FREE OFFER OR TRIAL."

Gioeli said he feels that consumers are taking advantage of his company, signing up for the teeth-whitening product just to win a free iPod being offered by another online site. According to Gioeli, consumers sign up for the product, then immediately cancel the order--even though WhiteOvernight has to pay the original site $50 for each referral. "We feel we're getting scammed. Consumers have to click two boxes saying they've read the terms and agreed to participation and have authorized the charges."

In fact, authorizing the charges for any "free" offer should be a red flag that the offer may not be "free." Any offer that asks for your credit-card, debit-card or phone number is probably not free!

By  |  May 23, 2006; 6:00 AM ET Consumer Tips
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Comments

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No doubt there are shady companies out there that purposely create obscure terms and conditions to mislead customers. Without AGs investigating such companies, such instances would be more frequent and more severe. Especially in cases where the charges are $12. It's easy to defraud people because no one is going to independently spend resources on recovering $12.

However, PEOPLE, if you are giving your bank account or credit card information out in response to an online offer, chances are that you are buying something! Expect to get billed.

Posted by: hoky | May 23, 2006 11:51 AM


I went to a job fair a while back and had free lunch. It was fabulous. They were also giving out free calculators, bags, toys, coffee mugs and pens.

Posted by: Freebie | May 23, 2006 12:01 PM

I agree, if you're giving your bank or credit card number you should assume whatever is NOT free.

My complaint is more with telephone magazine offers. They tell you you're getting 'free issues', and then it all works out to where you're pay $17 a month for several years.

Posted by: roseg | May 23, 2006 12:36 PM

ok, but what about giving your phone number. How can someone charge you (for a "free" trial) from your phone number? Don't they need your credit card or bank info?

Posted by: megamyth | May 23, 2006 12:57 PM

Unfortunately, many consumers are not aware of a practice called "LEC Billing" (A LEC is the Local Exchange Carrier; your local phone company). Using this method, third parties may collect payment for their services by attaching their fees to your local telephone bill.

The only way the third parties can legally place their charges onto your phone line is if you are over 18, you are the line "owner" (the telephone bill comes to you in your name), and you've authorized the third party to invoice you through your telephone bill. There may be additional rules or restrictions to limit the types of companies that are allowed to bill this way; but that's another story.

There are two critical steps you must take to protect yourself. First, read all terms and agreements when submitting any information to anyone. Just because the website does not have a "shopping cart" and does ask for your credit card does NOT mean you are not purchasing services.

Second, never enter your home phone number into a website form. This is probably the easier of the two steps, as it requires less action... however you're still open to other unwanted situations if you do not read the agreements and terms.

This billing method is not new, and can be provided by a variety of payment processors. Do a Google search for 'LEC billing' to learn more. One company that handles this billing method notes "LEC billing is a small industry..." which seems to imply they believe LEC billing will only increase in the future.

Posted by: takeshi | May 23, 2006 1:28 PM

RE: megamyth

Sounds like the company tells the phone company to bill the number for a certain amount.

I assume this is also how a certain popular phone service also bills.

Posted by: tallbear | May 23, 2006 1:33 PM

I never open emails offering 'free offers' or 'free samples' or anything like that simply because a lot of them will place spyware on your computer. People need to be extremely careful and never open emails offering free stuff coming from a company/website they didn't specifically request information from. Remember: if it sounds too good to be true, it IS.

Posted by: Elle | May 23, 2006 2:42 PM

Why is it up to the consumer to decipher every misleading presentation out there? Try free credit scores, oops reports. Credit vanguard enrollment $3.95 a month. My point is: excellent fiction is tolerated by all of us and we need to stop accepting this unethical behavior. Remember, grab three bananas and win a free XBox 360, oops you must agree to two offers first!

Posted by: Snake Oil 2006 | May 23, 2006 4:34 PM

You don't need to provide ANY information. Your ISP (mine is AOL) are pimping for these scammers in exchange for commissions.

Try a Google of "AOL NetMarket" a subsidiary of Trilegiant, parent company is Cendant.

Dozens of complaints and investigations by State AG's.

AOL provided them with my American Express account number saying I had signed up for this "service" but were unable to provide any documentation of how and when I joined. They then proceeded to charge me $99.99 a month for 6 months before my wife and I realized this wasn't something the other had purchased. I know we really should talk more.

This is white collar crime at it's worst and it needs to stop.

Posted by: Tip of the Iceberg | May 23, 2006 6:15 PM

I went to a job fair a while back and had free lunch. It was fabulous. They were also giving out free calculators, bags, toys, coffee mugs and pens.

Posted by: Freebie | May 23, 2006 12:01 PM

Got news for you, Freebie: none of that was free. Wait until the cards and offers (at usurious interest rates) start pouring in.

Posted by: Not-so-free Willie | May 24, 2006 10:45 AM

Overnite White is a complete scam. Missleading and Missrepresentation. Mr Gioeli claims that this product is FDA approved..... WRONG. The FDA does not approve teeth whiteners. And they give you the runaround when you try to cancel... LOSERS.

more to the story:
http://www.wsbtv.com/money/9177642/detail.html

Posted by: a-hole mark | May 30, 2006 1:13 PM

There is more to this story. When you read the "Terms" as posted by the 3rd party site, they short screen them, you can not scroll down to read the most important parts. This seems to be done by NovaPointe, LLC for the others; Whiteovernite, Whiteovernight, Cheat and Eat, GreatWhiteSmile, Skyfission, Burnfat2, Hoodia66, LeanlifePM, Skyccissor, AbsouluteBeautyco, HoodiaThin, JABVentures, Ultralife, domdeluise. They are knowledgeable about how to change names and amounts and if you check late at night the terms seem ok yet after you get charged and go back the terms, they fully appear and are not worded as you read them before, and some have found that if you exit after entering your card number before you submit and agree YOU STILL GET CHARGED just not shipped. This is one for the FBI to look into. They know what and how to rip u off via the "3rd party site"
Before you order, sleep on it.....

Posted by: jenni | May 31, 2006 4:15 PM

To Cancel NovaPointe e-mail: all of 'em
sales@novapointe.com
dunny1@earthlink.net
cs@whiteovernight.com
cart@novapointe.com
cs@cheatandeatdiet.com
afioeli@novapointe.com
jgioeli@novapointe.com
awirtz@novapointe.com
justin@novapointe.com
cancel@whiteovernight.com
cs@whiteovernight.com
cs@novapointe.com
diana@novapointe.com
inbox@novapointe.com
jruddy@novapointe.com
fulfillment@novapointe.com
webmaster@novapointe.com
callcenter@novapointe.com
tech@novapointe.com
aaron@novapointe.com
gw@novapointe.com
cs@whiteovernite.com
cancel@whiteovernite.com
I had to send an e-mail daily to get cancelled. Yes FBI should check NovaPointe, LLC and it's owners for mail fraud among other types of fraud. These companies know how to bet the system and skirt the laws.
Thank You for your news story.

Posted by: Rose | May 31, 2006 5:28 PM

To: jenni who posted above.
Please stop spreading "thekyle2000" email address. I have not worked for NovaPointe since 05/02/2002 and you are dooming my email box to a life of spam. I can confirm this if you want to contact me via that email address.

Posted by: thekyle2000 | June 11, 2006 3:53 PM

I need to cancel this subscription, that i did not want. please refund my $100 to my account, because i did not give permission to do so.

Posted by: crystal castillo | June 27, 2006 8:08 AM

Hellow,I too have recently got caught up in the White Over Nite scam.What your readers need to know is the only way to try to cancel thier products, whitch ther are three of them that they sign you up for,is by calling 1-800-630-2305. This number is provided in the directions on how to use the product. Ther is no way to cancel on there web site. The only way I found this out was I did not oder this for myself because I have no teeth but for my daughter and I told her to make sure she read the directions on how to use it carefully. Thank God she did. They only give you directions in the very first order after that they do not care if you know how to use it or not.I called to cancel my order but that was by phone, no paper trail,I hope it worked,Thank you for hearing me out. I hope this will help others.

Posted by: James Jay Malik | July 5, 2006 7:05 AM

Hellow agian,I just recieved and opened and READ the booklet that comes with the Video Professor. Everyone PLEASE READ page four (4) so you can cancel this product before you tapped for about 80.00 dollars that tou might not be awarw of. I got involved with this scam by filling out a servay to get a Free Gibson Guitar every sponser on that site is out to get your money how ever they can. Get your magnifing glass out for this one and read carefully. Thank you again

Posted by: James Jay Malik | July 5, 2006 7:47 AM

Hellow James again,I spent the better part of the last 24 hrs.writing E-mails to diferant companies bad mouyhing them to the max about thier fraudulant activities. I informed them that I was Going to bad mouth them on the net anywhere I could. I also directed them to this site so the would understand that I am a man of my word.When my bank opened today I was there. I explained to them what the problem was.They did not hesitate to close my acount and give me a new one. I cancelled my credit cards five years ago, now thats throwing your money away,if I cant pay for it outright I do not buy it. Well quess what I usualy get a ton of junk mail every day I exspected to get some replies from those who I bad mouthed vai E-Mail. It is 10:45 pm now and I did not recieve any junk mail or replies back from these companies I do not think anyone loves me anymore. Now thats a wonderfull thing. THINK ABOUT IT Thank you again for hearing me out. Close your accounts and the bull crap stops

Posted by: James Jay Malik | July 5, 2006 10:54 PM

Hellow, Two new items for consumers to be aware of. Video Profesor, and there so called ten (10) day free trail, this trail offer starts the day they ship it. In my case they sent it out on the 16th of June the catch is I did not recieve it until the 30th of June, I bought it before I recieved it, how nice for them.The second item is: Most Americans are color blind but for some reason or other we can see BLUE, that why traffic signals Green lights have more blue in them than green. Point is when there is something they do not want you to read they put a blue back ground behind it with black or other color print. If tour color blind this becomes almost impossible to read, thats thier plan,if tou cant read it you will ignore it. I have run into this problem more than a couple of times now. Consumer Beware.One more point in case. Most computers have blue back grounds with WHITE print this makes it very easy to read.One more note, still have not recieved E-mail of any kind, I have a life again. Thank you again PS You would think Video Professor would be guilty of some kind of mail fraud because they sent this to me by way of slow boat from China

Posted by: James | July 7, 2006 12:39 AM

HI again, Just got burnt by the weather channal. I had ther Desk Top Max service from dat one. Last night when I turned my computer my weather channal display said that they were sent persoal info they did not ask for. Next thing it asked me for was my pass word did not know I had one I never had to use it. Any way in the pI paid for it I should get what I paid forrocess of trying to get it I some how cancelled this service by accident. I contacted them via E-mail right away to exsplain the problem. Thier answer was I would have to reorder and pay for another years subscription. I already paid for a years subscription. Even the illegit companys tell you that thier service willbe in effect until the end of the time you paid for. This is an unfair practice I paid for a year I should have this until the end of the year, Thank you again, James

Posted by: James | July 11, 2006 4:36 PM

Wish I had read these sites before. My daughter did one of these surveys - said free sample - did not say anything about paying shipping and handling. The sample came in the mail with a bill for 3.95. I called the supposed customer service center - The person "Daisy" who I talked to, had nothing to do with service. I told her we did not order, she started telling me I did, what a mess...She then said she cancelled the next 60 day shipment - So I have stopped charges on all of our credit cards. I will be closing the account out tomorrow and asking for them to send me a new account number. STAY AWAY FROM NOVAPOINTE, LLC - Unfortunately when you do order stuff online you never know this is who you are dealing with until there is a problem.

Posted by: Joanna Wilson | July 24, 2006 8:32 PM

Hi,I like to check in every so often to see if there are any new " RIP_OFFs" that I should be aware of, none this time,or any new info. When I finished reading everthing I went back to the top of this page.Something caught my eye,(what is RSS)so I clicked on and started reading,very interesting and probably a good idea.When I got to the very bottom of this page there is an offer to (GET A FREE LAP TOP) just take a short 5-question servey and of course all of your personal info.. Is this a TEST to see if WE have learned anything here? If so I passed. Thank you for the education. James

Posted by: James Jay Malik | July 31, 2006 1:49 PM

I am sorry the owner of this product feels like consumers are taking advantage of him??? This is one of the biggest marketing ripoffs there is. Not just whiteovernight, skyscissor, burnfat2 and hoodia and more....Yeah yeah we should read the small print, lots don't but once your in their net. They did not send things in time for you to cancel and also try and get through to them to cancel. They make it very hard. And they enroll you in other services...If they think people are taking advantage of them maybe they should make it a little easier for someone to talk to, someone to stop them shipping stuff out. And I don't care what they say you can get a refund, talk to your bank or credit card company. These people are scammers. And they take money from those that need it the most, the elderly, people who cannot afford their product. They don't care. Just make sure you send their product back to them. Then you have the ability to request your money back. Send it certified so it can be tracked.

Posted by: Jan | August 12, 2006 6:52 PM

I RECENTLY HAD A CHARGE FO $79.95 ON MY CREDIT CARD FROM ONE OF NOVAPOINTE, LLC PRODUCTS. THE CHARGE WAS FOR "LEAN RX". I DID NOT AUTHORIZE THIS CHARGE. SO I RESEARCHED IT ONLINE. I FOUND 2 WEBSITES THAT I FOUND INTERESTING. GO TO WWW.RIPOFFREPORT.COM AND TYPE THE PRODUCT NAME( I USED "LEAN RX") IN THE SEARCH ENGINE. NEW COMPLAINTS ARE BEING ADDED EVERYDAY. YOU CAN ALSO GO TO NOVAPOINTESCAMS.COM FOR MORE UPDATES. THIS DEFINITELY NEEDS TO BE INVESTIGATED.I HOPE THEY GET WHAT THEY DESERVE.

Posted by: April | September 22, 2006 12:00 AM

I RECENTLY HAD A CHARGE FO $79.95 ON MY CREDIT CARD FROM ONE OF NOVAPOINTE, LLC PRODUCTS. THE CHARGE WAS FOR "LEAN RX". I DID NOT AUTHORIZE THIS CHARGE. I in fact did order the free sample for the charge of $6.95 shipping. I have already told the company to stop taking money from my account back in March when they took money out of my accout then. They did return my money but I discovered that they have taken money out again in September. I have contacted the company and they have returned my calls but not while I've been home. My message was to return my calls after 4:oopm. Someone needs to stop this company, I don't have the money to hire a lawyer.

Posted by: Luann | September 24, 2006 11:28 AM

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