Wednesday, May 19, 2010

The Internet has already brought great things to the world, but has also brought spam, phishing, scamming, etc. We all have seen them across the Internet. They promise money, weight loss, or other things a person may strive for, but they usually amount to only a lighter pocket. Online advertising has become something that the increasingly Internet-reliant society has become used to, as well as more aware of. As this is true, online ads have become more intricate and deceptive in recent years.

However, a certain type of advertisement has arisen recently, and has become more deceptive than any other Internet ad, and has tricked many users into credit card charges. These sites claim to be news websites that preach a “miracle product”, and they offer a free trial, and then charge the user’s credit card a large amount of money without informing them after the trial ends. These sites appear to be operating under one venture and have caught ad pages of high-traffic websites by storm. In this report, Wikinews’ Tjc6 investigates news advertisement sites.

These Internet ads work in different ways:

Hypothetically speaking, a reader is browsing the web, and then happens to come across something that they believe is too good to be true. A link on one of these high-traffic pages promises white teeth, weight loss, or huge profits from working at home part-time. Out of curiosity, they click on the link.

This is the way that people are attracted to these fake news sites on the internet. The domain owners draw in customers by purchasing advertising on some of the World Wide Web’s most visited pages. Curious users click and are led to what they believe is a news article. From anti-aging to shedding weight, these “articles” from non-existant newspapers and television stations depict a skeptical news reporter trying a product because they were instructed to by a superior.

As the user reads on, they find that the “reporter” miraculously achieves significant weight loss, teeth whitening, or other general health and beauty improvement. The reporter states that the reader can get the same results as they did by using a “free trial” of the product.

Next, the user looks to the bottom of the page, where there seems to be a set of user comments, all of them praising the product or products that are advertised — this is where we first see something suspicious. Across several of these false articles, the comments appear to show the exact same text, sometimes with even the same usernames as other sites.

There is obviously some kind of correlation. Although this appears to be true, most users who purchase these products do not look at multiple versions of these similar pages of what appears to be a fast-growing network of interconnected fake news sites.

Once customers have convinced themselves into buying the product, they are led to a product (or products) website which promises a free trial for a very low price. What they do not know about this, however, is that they are giving their credit card data to a company that will charge it automatically after the trial ends. In about 14 days, the user receives a charge on their credit card for an excessive amount of money, usually from about $80 to $100 (USD). All attempts to contact these companies and cancel their shipments usually prove to be futile.

What these sites have is a large amount of legal copy located at the bottom of each site, stating their right to charge the user. This site, a fake news article claiming to offer teeth-whitening benefits, has several paragraphs of fine print, including this: “…Upon signing up for the 10 day trial membership you will be charged up to $4.97 depending on various shipping and initial offer promotions at that time but not more than $4.97 upon signing. If not cancelled, you will be charged $89.97 upon completion of the 10 day trial period. Monthly thereafter or 30 days from the original order date, the charge will reoccur monthly at a total of $89.97 until cancelled…,” the site says.

Practices like this have alerted the Better Business Bureau, an American organization that studies and reports on the reliability and practices of US businesses. In a press release, a spokesman from the BBB spoke out against sites like this. “Many businesses across the country are using the same selling model for their products: They lure customers in with claimed celebrity endorsements and free trial offers, and then lock them in by making it extremely difficult to cancel the automatic delivery of more products every month…,” said the report that denounced the websites.

When a user looks at several of these sites, they notice that all of them have the same exact structure. Because of this, Wikinews decided to look into where some of the domains were owned, and if they were all in fact part of one company.

However, the results that Wikinews found were ones that were not expected. Out of the three random websites that were found in Internet ads, all using similar designs and methods to attract the customers, came from three different locations in three countries and two separate continents. The first came from Scottsdale, in the United States, while the next two came from Vancouver and Hamburg. There is no location correlation, but surely, there has to be something that connected these sites together. We had to look even further to try to find a connection.

There is some correlation within the product’s contact information. A large amount of the teeth-whitening products analyzed actually shared the same phone number, which lead to a distribution center located in St. Petersburg, Florida, and several other similar distribution centers located across the Southern United States. But, that explains only one of the categories of products that these websites cover, teeth whitening.

What about the other products? The other products such as weight loss and work-at-home kits all trace back to similar distribution centers in similar places. So, what do we make of all of this?

There is obviously some company that promotes these products through the fake news advertisements, but that company is nowhere to be found on the websites. All contact information is given on the product pages, and websites are copyrighted under the name of the domain, not a company. Whatever company has been the setup for these pages has been very good at hiding themselves from the Internet, as there is no information across the web about that mysterious large advertiser.

As a result of customers buying the products and having unauthorized charges on their credit cards, a large volume of complaints are currently present on awareness sites, complaint sites, and even the Better Business Bureau. Several customers point out that they were not informed of the steep charges and the company made it extremely difficult to cancel their subscription, usually resulting in the loss of several hundred dollars.

• “The trial offer was to pay for $3.95 for the cost of the shipping for one bottle. I noticed shortly after placing the order I had a charge on my credit card for $149.95. Unknown to myself the company charges for a membership if you don’t cancel within 14 days, I cancelled within 18 days…When I called the customer service number they told me the decision has been made and my refund request was denied. When I questioned the person on the other line about what I was getting for my $149.95 she told me I was not getting anything because I cancelled the membership.“

?“Tamara”, in a post to the Ripoff Report

• “This is a “free sample” scam: Pay only postage and handling and get a free sample of a tooth whitening system, they say. I looked for the “catch,” something that would indicate that there’d be hidden or recurring charges, but didn’t see anything, and ordered. Sure enough, a couple of weeks later, I see a charge for $88.97 on my bank statement…When I called, the guy answering the phone had obviously answered the same angry question many, many times: “Why has your company charged $88.97 to my card?” “Because you didn’t cancel your subscription in time,” he said tiredly.“

?“Elenor”, in a post to the Ripoff Report

One notable lawsuit has occurred as a result of these articles. Some of the articles about work at home kits specifically advertise things like “work for Google”, or “job openings at Google”. However, Google asserts these claims as false and has taken the case to court, as it is a copyright violation. “Thousands of people have been tricked into sending payment information and being charged hidden fees by questionable operations,” said Google in a statement.

The BBB has received over 3,000 complaints about products such as the ones that Google took offense to. The lawsuit has yet to begin in court, and no date has been set.