Accusations of false advertising may cost two Internet providers
By Greg Wright
Gannett News Service
Customers of two Internet service providers (ISPs) may be entitled to refunds, according to the Federal Trade Commission. The regulatory agency last week reached agreements with Juno Online Services and PC maker Gateway's Gateway.net service over charges of false advertising.
Both companies claimed to offer free Internet access, but "these so-called Internet access offers were anything but," according to Jodie Bernstein, director of the FTC's consumer protection bureau.
She said both companies directed some customers to dial long-distance phone numbers for Internet access without explaining that subscribers would be charged long-distance rates of $3.95 an hour.
What's more, Juno (www.juno.com) didn't adequately disclose the terms of its promotions, nor did it publish a phone number so customers could easily cancel their service, according to the FTC.
About 4.1 million people use Juno and about 400,000 subscribe to Gateway.net (www.gateway.net), according to the respective companies. FTC spokesman Eric London said he didn't know how many of each service's customers are entitled to refunds, but he urged them to contact the companies or the FTC if they have a complaint.
Juno customers can call 1-888-811-JUNO or e-mail email@example.com. Gateway customers can call 1-877-247-2051.
The FTC can be reached at 1-877-FTC-HELP.
Despite agreements reached with the FTC, some Juno customers continue to complain because the ISP is temporarily blocking some subscribers from browsing the Web if they spend too much time logged onto the service. Subscribers claim the tactic is unfair because Juno has no published standard for what constitutes "too much."
Greg Kawell of Birmingham, Ala., is one of those customers.
The father of six said his family spent about 130 hours a month on Juno, or a little more than four hours a day online, which he said he doesn't believe is unreasonable. Yet, he received an e-mail asking him to pay $29.95 a month because he was what Juno described as a heavy user.
Kawell said he asked Juno customer service representatives what constituted heavy use, but they couldn't tell him. Kawell said he considered filing a complaint with the FTC, but he since switched to another ISP.
The FTC's London said he couldn't comment about additional complaints against Juno.
Gary Baker, a spokesman for Juno Online Services Inc. in New York City, acknowledged that in order to reach profitability, the Internet provider is trying to sign up more paying customers and weed out subscribers who spend what the company considers too much time on its network.
Baker said Juno doesn't identify heavy users exclusively by the number of hours they are logged on. It also considers what times of day they surf the Web and what dial-up access numbers they use.
Juno, which pioneered free Internet access and e-mail in the mid- 1990s, posted a $9.6 million net loss during the first quarter of 2001. Like many other free Net services, Juno relies on advertising for most of its income, but the slowing economy has made the strategy unprofitable, according to Maurene Grey with Gartner, a research firm.