NETPLIANCE SETTLES FTC CHARGES, PAYS FINE

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(July 2, 2001) -- Netpliance agreed to settle charges brought by the Federal Trade Commission that claimed the company's ads for its I-opener Internet device were misleading.

The ads suggested the device could provide all the features of the Internet for $199. The FTC said the I-opener, which has no hard drive, cannot display some Internet sites or run some Internet audio and video sites.

The charges also stated that the company didn't disclose that the device was programmed to call in several times a day, and that consumers might have to pay long distance charges for the call.

McGarrah/Jesse, Austin, Texas, and later Omnicom Group's BBDO Worldwide, New York, did the ads in 1999 and 2000, when the FTC found problems. The company also settled several charges that its billing practices were misleading and unfair.

As part of the settlement the company paid a $100,000 fine and agreed to reimburse consumers for some charges. Company officials did not return a call for comment. -- Ira Teinowitz

Copyright July 2001, Crain Communications Inc.

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