Consumers: Beware of Online "Freebie" Scams, Including Magazine Subscriptions

Ethical, legal, and regulatory issues for the most part do not differ on a Business to Consumer (B2C) web site compared to a Business to Business (B2B) site. If a customer, whether they are a business or Joe Average consumer, is a victim of false advertising, leaking of confidential information or a scam, the harm done will result in lost customers and potential future revenue. Regulations vary from state to state, and are becoming more common in today's online world.

Ethics in business are important toward establishing a good rapport with clients. Internet surfers often receive pop-up banners from promotions businesses who are promoting other companies through their websites. These promoters often promise a big ticket item such as a free laptop or plasma television simply for registering on their site and selecting for example three vendors to "try out." It is a scam because what they require is that the customer sign up for a magazine subscription or open up a retirement savings account, and then never come through in sending the free item to the consumer. Their promise is that when the consumer has paid for the magazine subscription or opened up the account, it is only then that they will qualify for the free item. This is done entirely online and there is rarely a traceable name of the company who is tied to the website. There is also no contact provided for the consumer to find out when they will receive their free item or to complain; thus it is a scam.

Although most consumers will agree that it is unethical to trick a consumer into thinking they will receive a free computer simply for trying out a sponsor's product, many still are tempted by the offer and continue to fall victim. The customer most likely will get the subscription advertised, but it's unlikely that they would have sought the subscription without the offer of a freebie. Consumers will likely also be inundated with similar scam offers in their email inbox. Companies involved initially have only the intention of creating new business, yet they risk losing these highly sought after customers when said customer refuses to renew the magazine subscription since they relate that company to the scam site.

Another example of how B2B and B2C sites will lose customers and potentially be sued is if confidential information about the customer is broadcast or sold to another company or party. Confidentiality should be key when dealing with businesses online as well as in the brick-and-mortar world. There should not be any difference. Businesses are expected to act professionally at all times and should value client's privacy on all matters they deal with.

Violation of confidentiality has recently been a major issue online with credit card holders falling victim to the release of confidential information such as social security numbers. A consumer should feel comfortable when providing a credit card number online to make a purchase. A statement advising a "Verisign" secured site or some other type of security should be in place on any site where payments are accepted.

Amazon.com provides the following statement on its site;

"Amazon.com knows that you care how information about you is used and shared. Click the "Privacy & Security" links on this page for more information about your privacy and credit card safety."

In addition, Amazon does admit they share consumer information, however, they detail how and why this is done;
"Does Amazon.com Share the Information It Receives?"

"Information about our customers is an important part of our business, and we are not in the business of selling it to others. We share customer information only as described below and with subsidiaries Amazon.com, Inc. controls that either are subject to this Privacy Notice or follow practices at least as protective as those described in this Privacy Notice."

This disclosure is helpful to the customer because if they see this statement beforehand, they can decide for themselves whether to proceed with a transaction or to move on to another website. The business is protected because they have made it clear to the customer what they can or will do with their information.

Revealing trade secrets or intellectual property is one area where B2B and B2C may differ. Unless a consumer has invented a product, secured a patent, and was taken advantage of by a business, then the statement that revealing or selling intellectual property or trade secrets will not apply. Violations occur when internal employees leak information out or sell it to a competitor. Employees in this day and age are usually required to sign a confidentiality agreement upon hire, yet there are many who are willing to take the risk of fine or imprisonment. Employers are ultimately responsible for determining whether an employee poses a risk factor. Employment Due Diligence is to ensure that prospective new hires are screened for suitability prior to hiring.

Ethical, legal, and regulatory issues are very similar on a B2C site compared to a B2B site. Either way, the business guilty of or even rumored to be in the practice of illegal or unethical transactions will lose their good name since word of mouth travels fast.