'Free' Ringtones Investigation Continues

Florida's investigation into ads for "free" ringtones, which has already ensnared ad network AzoogleAds, is also likely to catch several Web publishers, as well as mobile carriers and other ad networks, Florida assistant attorney general Michael Palecki confirmed Tuesday.

"We have several Web sites on our radar screen that have been running false and misleading ads for some time," Palecki said. "We have evidence that they know the ads are false and misleading and continue to accept the ads and publish them on the Internet."

He adds that the Florida authorities intend to target a wide range of players involved in ringtone scams--which involve offering users "free" ringtones, but then enrolling those who accept in paid subscription plans.

"We are going after everybody in the industry, from those who provide the content to those who market the content--which are the affiliate networks--to the carriers," he said.

In the first of the ringtone cases, AzoogleAds last month agreed to pay $1 million and promised that future online ads will clarify that the service it markets isn't actually free.

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Palecki said he also expects that some wireless carriers will agree to more clearly itemize charges in customers' bills as part of upcoming settlements. Currently, he said, charges for the subscriptions that came with the supposedly free ringtones aren't always clearly delineated on people's bills.

The cases grew out of a one-year investigation that began when an assistant attorney general learned that one of her neighbors had been hit with $48 a month in charges after her 13-year-old daughter signed up for an allegedly free ringtone.

The misleading use of "free" in Web ads isn't just on the radar in Florida. Federal authorities also recently settled a case against an online ad company, Adteractive. That company was accused of violating CAN-SPAM by sending e-mails with subject lines promising free merchandise, when in fact, customers had to sign up for paid services like Netflix to qualify for the promotions. Adteractive settled by agreeing to pay $650,000 and promising that future promotional ads would make clear that consumers must first spend money to obtain the free merchandise.

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