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Gateway, Juno change disclosure practices

The direct PC seller agrees to settle charges it misled consumers with promises of free Internet service, and Juno agrees to disclose cancellation terms, according to the FTC.

WASHINGTON--Gateway, a direct seller of personal computers, agreed to settle charges it misled consumers with promises of free Internet service, the Federal Trade Commission said Tuesday.

Juno Online Services reached a similar agreement with the FTC. The Internet service provider settled charges that it wrongly told consumers who participated in a free trial offer for premium Internet service they would be able to cancel at any time without a charge.

"Free Internet access often turned out to be too good to be true for many customers," said Jodie Bernstein, chief of the FTC's Consumer Protection Bureau. "Hidden fees often lurked in minuscule fine print tucked away at the end of adds or service agreements."

The FTC said Gateway agreed not to misrepresent the cost or price of any Internet service it provides with the personal computers it sells and to refund certain charges to consumers who registered for its Gateway.net service between January 1999 and April 1999.

Gateway was accused of failing to disclose prominently that consumers who bought a computer would incur telephone charges for Internet connections.

There was no immediate comment from Gateway, which is based in San Diego.

In Juno's case, the New York-based company agreed to disclose cancellation terms, provide adequate customer support to handle cancellation requests, and disclose long-distance telephone charges that customers may incur.

"We really believe that our policies and practices have been very comparable to those of our competitors," Juno spokesman Gary Baker said. He said the company's disclosure standards are now "well above the industry norm."

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