"Free iPod" Claims Cost Spammer $2.9 Million

The FTC slammed nuisance advertiser ValueClick with a record-breaking $2.9 million fine for littering the internet with deceptive ads for free iPods, PS3s, and plasma TVs. Instead of providing freebies, ValueClick tricked people into signing up for useless services and then failed to safeguard their personal information.

The FTC alleged that consumers lured to ValueClick’s Web sites by these promises were led through a maze of expensive and burdensome third-party offers – including car loans and satellite television subscriptions – which they were required to “participate in” at their own expense, in order to receive the promised “free” merchandise. The FTC charged that ValueClick’s use of deceptively labeled e-mail offering free gifts and its failure to disclose that consumers must expend substantial sums of money to obtain the promised “free” merchandise violates the CAN-SPAM Act and the FTC Act.

The FTC also charged that ValueClick, Hi-Speed Media, and E-Babylon, misrepresented that they secured customers’ sensitive financial information consistent with industry standards. The FTC alleged the companies published online privacy policies claiming they encrypted customer information, but either failed to encrypt the information at all or used a non-standard and insecure form of encryption. The agency also charged that several of the companies’ e-commerce Web sites were vulnerable to SQL injection, a commonly known form of hacker attack, contrary to claims that the companies implemented reasonable security measures.

ValueClick to Pay $2.9 Million to Settle FTC Charges [FTC]

Comments

Edit Your Comment

  1. Ghede says:

    $2.9? A slap on the wrist. I want to see a 900% increase.

  2. rmz says:

    This is a good first step, I suppose.

  3. axiomatic says:

    How dumb do you have to be to not block their ads with your browser anyway?

    Firefox + ad block plus = Win!

  4. CornwallBlank says:

    I concur with Ghede, this is merely a minor inconvenience for these spammers. If they ever stopping spamming, and that’s an enormous “if”, then they will be doing so against shortly, under a new name, from different networks, with different domains, etc. The people who work on spam issues are already watching to see where they turn up next.

  5. t-r0y says:

    @Ghede: I agree. ValueClick probably considers that a cost of doing business. Time to screw more people in a new way to recoup the cost.

  6. Peeved Guy says:

    Has it been too long since there was a good religious flame war on this site for you’re liking? ‘Cuz you know this is where it’s heading with that pic.

  7. Quellman says:

    Free = no personal security, plus spending money on things you didn’t know you needed.

    Yes, I know people who have gotten their items before, but really, my time/security is worth more than actually spending the money to by the freebie retail.

  8. starrion says:

    They kicked puppies too.

    Spammers and con artists are the scum of humanity. Why can’t the FTC do to these companies what the SEC did to Arthur Anderson? We need a death sentence for companies.

  9. cockeyed says:

    What I want to know is how many people fall for this stuff? It’s gotta be kids that don’t know any better.

  10. @Peeved Guy: No be silly, it’s just a hysterical picture.

    One of my friends who was a sports photographer said he liked photographing “stupid loss” stories because it’s so much more of a challenge to capture the photos where someone looks like a total dope. (Not sad in defeat, but like they’re doing something moronic.) So I always appreciate the artistry of photos that make someone look dorky. :D

  11. snoop-blog says:

    i don’t feel sorry for anyone who believes they can get high dollar items (or any item) for free by simply filling out a form, which happens to also want your personal information. i have heard of getting restaurant gift cards but i think they still want your cc#.

    i once got a flyer in the mail from a car dealership that advertised i won like thousands of dollars worth of gifts. when i went online to select my “gifts” all the items on the website were worth maybe $2-4, and i had to pay like $8 for shipping for each item. lesson here: nothing is free.

  12. oakie says:

    @cockeye: a lot of college students.

  13. Peeved Guy says:

    @Eyebrows McGee: Don’t get me wrong, I laughed my ass of when I saw it. I agree that this is a work of art, but, I just know, in my heart of hearts, that someone is going to take umbrage.

    And, on topic, now, do parents not teach their kids old sayings anymore, like, “There’s no such thing as a free lunch”, “You don’t get something for nothing”, etc. Or at least s little analytical thinking?

  14. CarlR says:

    Thanks to Firefox and Adblock Plus, I had forgotten these ads even existed.

  15. The Porkchop Express says:

    @Peeved Guy: No, they don’t. From what I see out there, kids don’t know that anymore. Hell, adults don’t seem to get it anymore.

    There really is no such thing as free anything.

  16. maxx22 says:

    Yahoo used to run this stuff all the time. Some may have been valueclick; some wasn’t. Basically, these were identity theft ads designed to get all kinds of information about you.

    The user had to go through dozens of screens with verious offers, rejecting each one individually. Most people finally gave up.

    Eventually, if you stayed with program, either you were flushed or you HAD to buy something and send back authentication before you could get your “free” gift.

    Mostly, the companies whose gifts were offered (restaurant card, etc) were not involved at all in the promotion.

    The good thing coming out of this penalty is that legitimate web sites will think hard about accepting ads from value click or similar again.

  17. Thomas Palmer says:

    too little, too late

  18. dasunst3r says:

    I remember the days when people would spam forums with the “Free ____” pyramid scheme BS. My reply to them was that I appraise my privacy at more than the value of the gadget.

  19. Brie says:

    @Peeved Guy: I know a 70something man and his 40something daughter who both “get stuff for free” regularly. They call the 800 number/register with the website/send in the postage-paid card, receive the “free” widget, then tell themselves they’ll cancel whatever it was they signed up for.

    The sad part was when he told me, “The thing is, sometimes I forget to cancel, or they make it so complicated.” He shrugged and said, “I guess this is my hobby.”

  20. chartrule says:

    i think the penalty should of been higher and included jail time. rather than just a fine and monitoring them for 20 years

  21. BigBoat says:

    One needs to start somewhere friends.

  22. mopar_man says:

    @Peeved Guy:

    I don’t know how you could start a flame war over that pic. That shit is just hilarious.

  23. Trai_Dep says:

    Whoa, great graphic!
    Although, I’m offended by doves.

  24. PirateSmurf says:

    2.9mill? thats like what to them a morning coffee? How many millions see those dumb adds and how many of those fall for it? More then you think how about 2.9 billion?

  25. Peeved Guy says:

    @mopar_man: Allow me to refer you to what I said earlier. My intention was not to incite a flame war, but, rather, to point out that some folks might be offended by such an image of their spiritual leader. And considering that there has been posts recently about the lack of sensitivity of some posters, I figgured that it was inevitable.

    @Trai_Dep: What are you? Some sore of Columbidaphobe, or something?

  26. mike says:

    Geez…I hated all these ads that came out for free iPodes. I actually got sucked into this…the only one that is guaranteed money is the people that make the program.

  27. Greasy Thumb Guzik says:

    One of my relatives worked there for a while.
    She hated the place.
    Quit after a few months.

    Plus it’s owned by Swedes, Volvo driving Swedes!

  28. Moosehawk says:

    Remember that post from the other day about blaming the victim? Well, this is one of those times when I think we can at least somewhat blame the people that click on these ads.

    I really wish they’d fine these companies more though. They should be non-existant.

  29. rpm773 says:

    Well, this is all great. But when do I get the 13 Ipods I’ve won over the years?

  30. @Peeved Guy: Well, I have two degrees in theology, so hopefully if *I* find it hilarious, most other religious types will also find it hilarious. :D

  31. M3wThr33 says:

    I got a free iPod by doing this. It was way back when the craze started, but I did get it.

  32. realist.com says:

    I have no problem with exploiting the idiot masses

    ValueClick FTW

    idiot Missouri grandma deserves no sympathy for not understand the “internets”

  33. Sam2k says:

    They should just advertise the legitimate ones. This year alone I’ve made over $900 from completing a Free iPod site and a Free iPhone site.

  34. JollyJumjuck says:

    @realist.com: And it is precisely because of attitudes like yours that we have so many parasites on society. “Little” fines like this won’t stop companies like ValueClick. In a perfect world, victims of fraudsters, scammers and con artists ought to be able to perpetrate vigilante justice while law enforcement looks the other way. If you can’t be bound by society’s rules, you really shouldn’t enjoy its benefits either.

  35. camas22 says:

    dear consumerist,

    this picture is even more offensive than one of your frequent articles that explore the excruciating minutae of irrelevant complaints.

    cheers,

    andy

  36. Blueskylaw says:

    I hate this company with a passion, they are one of the most annoying and deceptive companies whose spam/pop-ups ever graced my computer screen.

  37. A-Consumer-Advocate says:

    Actually, I take issue with the idea that there is no such thing as a free (anything). While believing this may be safer for some people, it would prevent others from taking advantage of great opportunities.

    For example, what about the free snacks at the grocery store? Or coupons for free admission to a venue?

    Despite the fact that I *might* choose to spend money at the grocery store or at the venue, these items are still 100% free, to me. It doesn’t matter that someone else had to pay for it–that is beside the point.

    Don’t be afraid of taking advantage of a good deal. Just make sure you know what you’re doing and go at it with your eyes open.