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The Courts Government News

Netpliance Pays Up For False Advertising And More 67

Posted by timothy from the we-just-assumed-they-wanted-to-pay dept.
The Dev writes: "According to this story Netpliance 'greed to pay a civil penalty of $100,000 and reimburse some customers who had been charged Internet access fees before they used the service.' This is probably in response to their tactics after it was discovered that the I-Opener made a cool portable Linux workstation." It didn't take after the realization of its possibilities as a slim linux box for Netpliance to start charging people whether or not they signed up for their service.
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Netpliance Pays Up For False Advertising And More More

Netpliance Pays Up For False Advertising And More

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  • Re:shady dealings (Score:4)

    by cvd6262 ( 180823 ) on Monday July 02, 2001 @04:15PM (#112540)
    Someone on a hacking-the-iopener BBS tried to blame the hackers for NPLI not turning a profit. One of the users turned around and went through the company's numbers. They found something interesting.

    iOpeners cost ~$400 (most of that being the LCD screen). They sold them for either $99 or $199. To keep it simple, let's say that every unit sold went for $200. The price of service was $21.95/month, most of which went to the cost of said service.

    So, NPLI was making about ~$10/month (I know I'm being generous) on every unit on which they had lost at least $200. This means that they *could not turn a profit for at least two years*!

    I really think that NPLI was doomed with or without those of use who like computers in our kitchens.

  • Get the conversion kit, a new SODIMM and make it useful by installing Linux on a low-profile laptop drive...
  • I don't know much about those other devices but I bought 2 IO's when they were $99 each (no service contract). I easily put a 6GB 9mm hdd in one and poped it in my car to play tunes. I got a cheap SMC usb nic for the other one and it and my coffee table are quite comfortable together. For the one in the car, I did the audio hack which required soldering on to small smc's (surface mount components). All the info can be had from linux-hacker and links from there.
  • Legally, the definition of Internet functionality is completely clear. http (Web) and other services are merely provided over the Internet -- "Internet functionality" itself mearly implies a fully functional TCP/IP stack which, of course, QNX, which Netpliance's I-opener uses/used. I think what the FTC meant to say was "complete Windows functionality" and I don't recall Netpliance ever claiming that the I-opener had the complete functionality of a Windows system.

  • Wait a minute, it took you a year to figure out they were billing you, and you're cranky that it took 6 calls to get a refund? I sure wouldn't give you a refund - a year is a long time to be paying for something and then say you never wanted it in the first place! Too bad more companies aren't like that - I'd always be driving a brand-new car :)

  • Netpliance's stock price is at about 40 cents
    a share and they are basically sitting on the
    remainder of their IPO money in the bank. The
    $100,000 figure seems rather paltry compared to
    how they swindled both their I-Opener users AND
    their investors. Be on the look out for this
    company to reinvent itself with the Netpliance
    IPO seed money.
  • One) I had set up to automatically pay down that card over a period of time, online at wingspan. I only noticed when almost a year later I checked and saw that the balance wasn't as low as I expected.

    Two) I would be ok with it taking 6 calls if they hadn't claimed it would be taken care of on call 1 then proceeded to bill me for two more months, refusing to take care of either the new charges or the old ones on call 2, making me jump through hoops to talk to someone who could help me, who then proceeded to repeat this whole scenario a second time.

    If I had put linux on it and violated their business model, or actually signed up after they changed their terms things would be different, but as things stand they never even informed me that they had changed terms, nor that my credit card would be charged for anything more than for the purchase of the machine itself.

  • I guess it does leave a lot of room for interpretation.
    Techie: Welcome to I-Opener Tech Support. What issue do you need resolved?
    Customer: Yeah, I'm trying to hypersurf the World Wide Net, but I can't seem to do it.
    Techie: Have you removed your I-Opener from the box?
    Customer: Yes.
    Techie: Have you plugged in your I-Opener?
    Customer: Yes.
    Techie: (realizing this is going to be one of his tougher calls) Okay, I need you to bring up your command line and type 'ping 204.221.202.11'.
    Customer: Okay. I did it.
    Techie: What does your screen say?
    Customer: 'ping 204.221.202.11'
    Techie: (groaning) Now press return, and tell me what it says.
    Customer: 'Packets sent: 4, Packets received, 4, zero percent packet loss.'
    Techie: Congratulations! You've just accessed the Internet! Thank you for calling I-Opener tech support.
    Customer: Wait a minute! Is that all this thing can do?
    Techie: Pretty much. Well, there is traceroute, but that one gets a bit complicated. Just stick with 'ping' for now. Have a nice day.
  • yes, I would consider it. go to my webpage for my email addr and mail me - we'll go from there.

    --
  • May I ask a serious question? Would you be willing to sell me your used I-Opener? I am very interested in having one. If you would be, please respond to this post and I will gladly talk to you about it more. Thanks.

  • The point about them not stating that they would require a monthly payment is more or less meaningless. At some point, somebody had to sign something to authorize that. Someone had to fork over a credit card number. I can see this engagement happening at the checkout stand and a confused potential customer finding out at that time, but that customer has the option to tell the clerk something uncivilized and leave without singing into the contract

    the first wave or two of sales had no committments for service, dialup, or whatever. you bought it outright with the understanding that, yes, it was designed for their own online service, but the sale of the unit at point-of-purchase required no committment; you had to activate it (or have your mom, etc) later on when you are ready to join.

    when the slashdot article came out and the rush to circuit shitty was on, I went down there to buy mine and of course the salesman said something about 'this isn't a PC, you know; you'll have to sign up for online service when you get home'. yeah yeah - I nodded him off like a good little customer and grinned all the way home with my new toy.

    the second wave of purchase did have a piece of paper clumsily taped onto the package saying that 'you should not open this unless you plan to buy our online service'. again, this was not enforceable and was not a legal document. I cut right thru that amateurish photocopy and enjoyed hacking iopener-v2.

    the only time I had to deal with netpliance was when I ordered a unit via their $39 extortion^Hmail fee. they did have my name online at that time. I asked if it was ok to buy the unit NOW and register it later on for - uhm - I mean, 'as a gift'. the guy on the phone wasn't fully prepped at that point so he said 'ok' and all I had to do was cancel the service the day I got the unit, then hold onto the unit until the 'gift recipient' was ready to purchase an online term. that's all I needed to know - (thank you).

    see, this is darwinism in the business world; if you're so dumb as to not do your business planning and modelling up front, you deserve to go extinct. maybe the next species will learn from your extinction. in the meantime, a lot of linux hackers had a lot of fun building a p1-166 style box from a $99 head start (it was rumored that there was closer to $400 in actual manuf. cost/components in there - $99 was the deal of the year for hardware-hacker fun)

    --

  • I did read the contract. It did not state anything about recurring billing at the time I made my purchase. Those were things they grafted on after the fact when everybody noticed that these would make a great little linux-Xterminal/cheap-ass-mp3-player/recipe-lookup -station.

    They were not within their rights to bill any more charges than the end user had authorized, period. Speaking as the former owner of a small business, you just "don't do that."

  • Although I never used either of my I-openers as it was intended (both run Linux), I understand that the software they provided included a port of Realplayer that I-Opener ported to QNX themselves. IIRC, they made a deal with Real Networks to start from the Linux code for Realplayer to do the port. So yes, it could do digital internet audio, at least for .ra files (I think it was RA 5, which didn't do MP3s).

  • OK, maybe you really did get screwed, but I'm still surprised that you could get things fixed after paying for it for a year. You must be a better negotiator over the phone than many :)

  • What he said.

    I'm quite happy with my IO. 10" diagonal 800x600x16-bit dual-scan screen is comparable to a low-end laptop. Grabbed the soldering iron and wedged in a K6-III-333 underclocked to 200 MHz, and cooled passively. Burned a new BIOS boot logo, soldered in a second serial port, VGA-out and audio-out, mounted a 6G hard drive in it and an external IDE port for a CD-ROM or external drive enclosure... all in all, makes a very nice jukebox. As an added bonus, if I take it in the car, I can use the serial port for GPS and moving-map software.

    Basically, with sufficient hacking, an I-Opener can be turned into the equivalent of a low-end laptop with a dual-scan screen. You may be able to get a better deal by buying a used laptop, but it won't be as much fun (nor will you learn as much) as you will by buying an IO and turning it into something unique.

    Pics of my mods at: Tackhead Sound System [yahoo.com]

    Props and shout-outs to everyone (too many to mention!) on linux-hacker.net who helped make it possible. And to Netpliance who, despite being real pricks about their TOS, gave me some k00l toyz, even if I had to wrestle with them in order to make them live up to their end of the bargain.

  • Did the TOS include the "seller reserves the right to change TOS with or without notice" clause? If so, I think you're probably SOL. They followed the letter of the contract...

    Not to say that they're not total asswipes for putting such a clause in a contract to begin with... But that's a more general problem that society's going to have to deal with.


    --Fesh

  • ok i think they were sold at Circuit city, but where are they now? and do have you get charged for internet access? -m1ha5 "When the brainwave-compatible gigabit ethernet interface can be plugged into your ear, will there be NetBSD/Human port?"
  • ...does anyone really use these anyway, apart from grandparents of Slashdot readers? :-)

    Internet set-top boxes for TVs are sold over here, but I don't know anyone under the age of 50 that has one...
  • Look if you didn't notice that the company had its fingers crossed when they wrote the contract then that is your problem, understand your problem I will spell it out for you: Y-O-U-R P-R-O-B-L-E-M.

    As a capitalist corporation Netpliance was Fully entitled to remove as much cash from your account as they felt like, as a corporation they are by definition in the right. Look at it this way how many times did you go over the speed limit after you bought the machine, under the Acme rentals argument that would entitle netpliance to fine you $150 per time...

    Uhh ohh, the ray gun appears to be wearing off, I think I will go and have a nice little rest and read The Fountainhead or Atlas Shrugged a couple of times.

  • I think I read it as someone signs an X year contract and then they raise the rates. You know, buy this computer for only $699.00 * (* Buyer agrees to subscribe to XYZ Isp for 5 years at $21.95 per month). After you are locked into a multiyear contract, THEN they raise the rates.

    You can't exactly change Isp's.

    At least that's how I read his statement.

  • I wholeheartedly support banning of ALL rebates.

    I was right with you, up until that.

    This mindset of "I don't like it, so let's make it illegal and enforce that law at gunpoint" is destroying this country.

    It's creating a nation of sheep who think they exist to serve the government, not vice versa, and it's also making that government so huge that already the MAJORITY of our income goes to governmental entities at the federal and state level, instead of going toward our own futures and those of our children.

    Every time you bitch about some stupid, ill-considered law that bothers you, look back to statements like yours above as a major reason they exist.

    -
  • > "Exploiting" or even "cherry picking" loss leaders is hardly "Bad faith". Since it is really the responsibility to those selling the things to make sure their business model is viable.

    True -- hence my use of the word "perhaps". There were people who bought a dozen of the things over the phone, telling the rep they were gonna give 'em to their relatives.

    The ethically-questionable part was lying about one's intentions at time of purchase. The fact is they were (initially) offering the things for sale without a minimum subscription term, and you could have phoned up and said "I intend to encase them in cement and use them to prop up my car" and they'd still have been obliged to sell you one.

  • > The credit card number was given during the purchase of the hardware. They TOLD people that they did NOT have to sign up for the internet service, and of course, would not be billed for it until they did.
    >
    > Then they proceeded to charge these people for the service anyway. That's fraudulent.

    Exactly.

    And the original rationale for "it doesn't cost you anything until it phones home" was that people might buy the base unit for a relative, and the relative would then pay the subscription cost -- the point being that there might be a month or two between "I bought it" and "Grandma's birthday" when the thing gets plugged in.

    ("Here, Grandma! Now you can email me! And it only costs you $20/month!" ;-)


  • Dear Bryan at Grateful.net,

    Please respond to this post since repeated attempts at contacting you at either bryan@grateful.net or through http://www.grateful.net (does not exist) have failed for me.

    I am still very interested in purchasing this device from you. I can sent you my email on Slashdot if you want me to.

    Thanks,
    Ryan
  • Exactly! If someone is going to sell hardware at a loss, that's their problem.

    This is about to become very interesting with Microsoft's X-box coming out. Here we have a high-powered PC, with top-notch graphics, a P-III 733Mhz, 64MB of RAM (or is it 128?) plus DVD, 100MBit ethernet, and other useful stuff. It will be sold by Microsoft for at least $100 dollars below cost.

    Now, what's to stop people from porting Linux to it and using it as a home computer? Or a cheap network server? Maybe it doesn't have VGA output?

    Maybe Microsoft will try to write the contract / purchase agreement to make that illegal. I doubt that will work, just have a minor buy the hardware, the contract will not be legally binding then.

    But since Microsoft intends to make the money back by licensing software development kits, they have to maintain firm control over who can create software for the box.

    My expectation is that the BIOS of the X-Box will refuse to boot from any device which does not have a Microsoft-copyrighted signature in the boot sector. That doesn't mean that people won't be able to hack it, but it does mean that anyone that *distributes* software for it without a license from Microsoft can be sued for copyright violation.

    It will keep hacks private and non-commercial at least. Will that be enough? After all, if someone puts an ISO image of an X-Box bootable Linux distro on the net, missing only the Microsoft signature, and the same web page has instructions on how to copy the Microsoft signature off your copy of "Halo" to make the Linux disk bootable... I'm sure Microsoft will send out the attack dog lawyers.

    Getting back on point.... Netpliance could have done the same things to make sure the device only was used the way they want. But they didn't. Tough for them.


    Torrey Hoffman (Azog)

  • How are refunds implemented? (Score:4)

    by Tackhead ( 54550 ) on Monday July 02, 2001 @03:39PM (#112565)
    From the FTC's news release [ftc.gov]

    Blockquoth the FTC:

    "First, the company billed some consumers for Internet service based upon the date they received their i-openers. These consumers, however, did not owe the company money because, when they ordered their i-openers, the company had promised them that they would not be billed until they actually used the service."

    "Second, the company back billed these same consumers for months of Internet service by charging their credit or debit cards without their consent."

    "As part of the settlement, the company agreed to refund those consumers for the amounts illegally charged to their accounts."

    It appears from my reading that there are two classes of people entitled to refunds:

    1) If they said you wouldn't be billed until it phoned home, and it didn't phone home, and you got billed.

    2) If you got back-billed for multiple months (IIRC there was a thread where people got hit with multiple months of billing all at once, but I can't verify that.)

    Does anyone know how such refunds are to be administered? (i.e. do you have to phone NPLI and ask for them, or should you expect that within a certain timeframe, your credit card will see a pleasant surprise?)

    Without getting into the ethics of getting money from a nearly-dead dot-com, if there's an FTC ruling, and the company has agreed to settle on this basis - it seems that people in either category have a right to this money, and they ought to be able to get it if they choose to exercise that right.

    Anyone have details on how this sort of thing "usually" works out?

  • well, of course you have to have multimedia. how else can Mom hear "You've Got Mail!"???
  • Tried and true formula for ctrl-alt-delete business....

  • I especially like this part:

    "The company also agreed to change its practices so further violations would not take place."

    Seeing as how they have stopped offering the i-opener service, and sold the existing customers off to Earthlink, that shouldn't be too difficult for them.

    I still get very mad at them whenever I think about it. I purchased two i-openers, one for each of my parents. My mother went through 4 of them before we gave up (the modem kept going bad). My dad faired slightly better until the change-over to Earthlink.

    First, one of the big things Netpliance talked about when notifying their customers they had been sold out was that their monthly service would drop from $21.95 to $19.95! Great. What happens? Earthlink just hikes their rates [earthlink.com].

    My irritation with Earthlink didn't stop there. When my father called them because he couldn't connect to their service anymore, the support person told him that there wasn't anything they could do.

    "No one knows anything about those things, and anyway, they aren't high-powered enough to handle our service. It is just going to get worse. I would suggest you get a real computer instead."

    Fantastic customer service there. Not to mention the fact that I waited for one hour and fifteen minutes during the middle of the day to speak with an Earthlink representative just to cancel my two accounts with them!

  • Re:shady dealings (Score:3)

    by Tackhead ( 54550 ) on Monday July 02, 2001 @03:52PM (#112569)
    > this should make an interesting trial case for all the discount PCs that require 1-2 year contracts with AOL or some other ISP (and end up costing as-much-as twice what the PC alone would have gone for). could these tactics get the same treatment as Netpliance's?

    I don't believe so.

    The thing about NPLI was that they didn't, initially, have a contract. You bought the device for $99.00 (plus $40 shipping if you got it direct from Taiwan), and you owned it, free and clear.

    It was useless without either (a) h4x0ring it, or (b) using their subscription.

    They expected people not to hack it, but to use the subscription, but (as the contract was originally written), you could stop the subscription (rendering the device useless) at any time, and billing wouldn't start until it had phoned home.

    (The device, as originally configured, was designed to phone home and activate itself when first plugged in.)

    What is at issue is that Netpliance personnel, when asked (I can confirm this, because this was my experience when I ordered mine) about when the subscription charges started, said - point-blank - "No, you won't be charged for the service until it phones home".

    When people who bought the devices and never plugged them into a phone line got billed, all hell broke loose, and this is what Netpliance is being LARTed for.

    Yes, the hackers who never intended to let them phone home (and who never did let the unit phone home) were exploiting the loss-leader nature of the deal. Although this was, perhaps, acting in bad faith, it was still within the law.

    Much later - after Netpliance had adjusted their terms of service to include a contract - purchasers under those terms were legitimately billed.

    So this doesn't have much to do with the "Cheap computer with 2 years of MSN/Earthlink" deals, where the ball-and-chain is disclosed up front.

    What Netpliance did was attempt to invoke the ball-and-chain without having the "chain" (contract) in place.

  • so they created a product and sold it at cost hoping to make money as an ISP ... unfortunately it caught up with them.

    Just as an FYI, it wasn't "cost". No matter how you calculate "cost" this sucker was orders of magnitude below cost. We did a "BOM analysis" and came up with an estimate of $450 just for the parts (in bulk). That is before paying for all those infomercials, Super Bowl ad, design cost, support, lawyers, etc. Right before they went into a coma they had 180 employees. YIKES.

    I am sure many business school professors are looking for the right case studies for their students to study the Internet boom, this is certainly one to look at as an extreme example. It is absolutely the most absurd dot-bomb I have seen, and that is saying something. Even if there weren't stupid enough to make it so easy to hack, and everyone signed up for service, they still were not headed for profitability.

    What a bunch of morons, they deserved this fate.

  • Well... it looks like Linux is not an internet-compatible operating system, because, while it can do digital music and video, I can't download WinAmp over the internet and expect to run it.

  • Looks like somebody didn't read the linked articles.

    The thing was, they messed up in their fine print and never required you to sign up for service. A bunch of people ordered one for the cool device (incl. me) and before ever shipping the product changed their licensing terms to make it a requirement to use the service. At that point, either you pay or you don't get the device. As the article mentions though, they actually charged people for the service, even when it wasn't used.

  • I got caught up in this as well. (Score:4)

    by Edward Kmett ( 123105 ) on Monday July 02, 2001 @03:53PM (#112573) Homepage
    I actually purchased one of these for its original purpose (for my grandmother) to get her on the internet for her birthday. After I made the purchase she wound up getting a (used) real computer from a friend. Therefore I didn't bother to remove the I-Opener from the box. Netpliance after all wouldn't take the machine back. Mine was purchased right before they made the declaration that they would be automatically signing everyone up. A year later, I was cleaning up my credit card bills and found out they'd been billing me all along.

    It took about 6 phone calls and various threats to get my money back - which was promised to me on 3 different calls, but somehow they kept failing to follow through.

  • The company also falsely claimed the i-opener could provide complete Internet functionality, when in fact it could not process multimedia features like digital music and video or run software available over the Internet, the FTC said.
    Well, maybe it can't do that with the software which the company chose for the i-opener.
  • Sure it was justice in this case, but what of those who sign contracts with ISPs only to have their rates changed later down the line. Personally I think that affects more people, and I wish some lawyer would seriously go after AOL or Earthlink for unnecessarily raising prices.
  • xmms!

    it'll even open just about every stream that winamp can, and once i told konqueror that .pls files should be run by xmms, live365.com works just the same as it does in windows.
  • They're toast, then?

    They're idiots, one way or the other. Still can't crack mine though... anyone know how to get past the QNX login prompt when there's no passwd file?

    /Brian
  • Their business plan was not quite as stupid as that of Digital Convergence [slashdot.org]. At least these guys were smart enough to charge for their hardware (and thus they didn't go under quite as quickly). They did screw up their license agreement [slashdot.org] in a similar way, and a href="http://slashdot.org/article.pl?sid=01/04/17/ 1538216&mode=nested">underestimate the inginuity of their more technical users in the same way...

    Some people never learn...


    --
  • The Fact is that i-opener were completely within their rights to bill people even if they said they wouldn't. People should read the contract! They didn't, they got billed, so what, so what if the contract didn't mention being billed, they wouldn't have read the contract anyway.

    This sort of thing really p****es me off. Its like them goddam environmentalist tree huggers who want to stop the oil companies drilling for oil on the national mall, who cares if there isn't any oil there? Its a free country isn't it? And in any case if the national mall was that good they wouldn't have built a shopping center there now would they?

  • Maybe I'm missing something? (Score:4)

    by Restil ( 31903 ) on Monday July 02, 2001 @04:50PM (#112580) Homepage
    Ok... I agree its wrong to charge someone for a service they're not using. However, thats about the only point in that article that makes any sense.

    The point about them not stating that they would require a monthly payment is more or less meaningless. At some point, somebody had to sign something to authorize that. Someone had to fork over a credit card number. I can see this engagement happening at the checkout stand and a confused potential customer finding out at that time, but that customer has the option to tell the clerk something uncivilized and leave without singing into the contract.

    Secondly, what exactly is "full internet functionality?" From a technical point of view, I have full "internet" functionality if I'm able to open a tcp socket to another computer on the internet. We are now functional. Granted, the iopener's basic design did not allow EVERY conceivable internet service to run. How exactly is this a problem? You can't play any of the pc or mac games on it. does this mean its lacking functionality? Its simply not an option it supports, but there's nothing that precludes such an option from being available, should someone port such a game to that platform and find a way to flash it on there. Yes.. not all iopeners have hard drives.... yet. :)

    I wonder how many of these issues aren't just thrown in as padding to make the lawsuit seem more legitimate? Does it improve their chances of winning the suit on SOME ground even if its not the issue they were actually trying to go after? I wonder.

    And what of the consumers who bought into it anyways? Its really sad that the average human being looks at a pretty box on a shelf in a store, and just plops down some money and walks out with it without ever thinking about what they've got. Then when its not everything they hoped for (and probably nothing ever is), they get upset about it. I wonder what would happen if they bought a discount TV set and discovered, after getting it home and unpacked, that it DIDN'T come with a remote control. I mean.. every OTHER TV set has a remote control, how can we reasonably expect that this model wouldn't?

    So what was advertised anyways? did they say it had multimedia support? did it? Did it play ONE file format of some kind? Then it has it. It doesnt' play real? It doesn't play asf? Oh.. it plays mpeg.. its got multimedia support people. The fact that 99.9% of the content on the internet doesnt' support it, DOESN'T MATTER. Educate yourself if you want to know what you're getting. Otherwise, you'll always be disappointed. (DISCLIAMER.. I dont' know WHAT the iopener supports, and I dont' intend to find out, so if my hypethetical situations here are wrong, please don't sue me :)

    -Restil
  • I bought my first iopener the day the first slashdot story appeared. I paid the $39 ransom fee for shipping.

    got the toy in the mail and hacked it for linux. it was very cool and I was envied at work when I had one on my desk.

    I couldn't resist the $99 price so I bought 2 more. then the novelty wore off and I sold those 2 and kept my original one.

    its been sitting in a corner gathering dust ever since. I mean, what's the big deal [anymore] about a p1-166 cpu with a passive matrix screen and no external storage (except for usb - like I said, no external storage).

    I guess it will sit next to the old atari 800 that never sees use anymore as well as the other antiques that I can't throw out; yet I refuse to even turn on and spend time on.

    the netpliance toy was great for a few months. I knew the company would go belly up - its just too bad that the boxes were slow even at the time of their popularity. now, they're not even worth booting up...

    --

  • > I wholeheartedly support banning of ALL rebates.

    Yeah, just what we need -- more rules, regulations, and government intervention. Just vote with your wallet and don't buy Age of Empires 2 or whatever if you don't like the deal. Take some responsibility upon yourself instead of saddling the rest of society with it.
  • this should make an interesting trial case for all the discount PCs that require 1-2 year contracts with AOL or some other ISP (and end up costing as-much-as twice what the PC alone would have gone for.

    It worked for the cell-phone industry. Service buys the subsidized hardware.. i think it failed for the IOpener because the market was already much more mature - this scheme works for emergent techs (with more uncertainty on the part of the buyer that the whole company could fold and leave them with a pricy pc of hardware but no infrastructure).

    On anther note: I hope they dont completely disapear, it would be nice for them to start selling them as diskless workstations or XTerms or some-such... just keep them cheap... and add a touchscreen option. Im going to need a computer for the bedside nightable soon..

  • Meow. Ignorant idiot... Open Source my ass. I'm in the industry for fun and profit. Not the headaches... I did my last open source project years ago. Never again.

    Meow.

    - MaineCoon
    http://www.mainecoon.net/
  • I encouraged my parents to get one so that we "kids" could reach them by email. They used it for perhaps 4 months, off and on, but there were constant problems, both with the service and with the billing, mainly because Netpliance never could arrange a local contact phone number, and the unit had to call long distance at fixed intervals to keep itself updated, even when nobody was on it. The Netpliance people strove mightily to make it work for them, but eventually they gave up and went for a "real" computer[1] and a local ISP[2]. That was the breakthrough for them. Turned out that they didn't need the simplicity of the i-opener (practically its only selling point) when they had live technical support to get them over the initial learning curve.

    [1] Ok, it's a 98 box. (cat flames >/dev/null 2>) is all I have to say about that.

  • The common perception when you tell someone that something that looks like a desktop computer has complete internet functionality, is that it will do what their neighbors Pentium box does. Yes, us geeks know differently... but still.

    Nobody thinks their palm is going to be the same as a PC...

    THat makes it misleading advertising.

  • I see where you might have come up with that reasoning, as SOON as they continued to charge you, you should have written a letter to both the I-opener people and to your credit card company ( as well as called the company to refute the charges). Your authorization was not given, and the charges were fraudulent.

    People should not give *one inch* when a big company starts charging your card, by mistake or not.

    Sure, if it was the little dive shop on the corner and the guy just made a mistake, and you can go to him in person and sort it out, maybe you don't get him in shit with Visa... but you have to consider, in a large company, how many times it happens if it happens to you.
  • The credit card number was given during the purchase of the hardware. They TOLD people that they did NOT have to sign up for the internet service, and of course, would not be billed for it until they did.

    Then they proceeded to charge these people for the service anyway. That's fraudulent.

    As for the 'full internet functionality' thing, yes, us geeks who already know about it assume it can't do what our home PC can do.. however.. when you tell Joe American that something that looks like a cool computer has full internet functionality, you would buy it assuming you can do the same things with it that your neighbor does with his computer. This is not the case, so this is misleading. It's there deliberately to mislead the consumer into thinking it does more than it does.

  • Yes, the hackers who never intended to let them phone home (and who never did let the unit phone home) were exploiting the loss-leader nature of the deal. Although this was, perhaps, acting in bad faith, it was still within the law.

    "Exploiting" or even "cherry picking" loss leaders is hardly "Bad faith". Since it is really the responsibility to those selling the things to make sure their business model is viable.

  • ... is a $100k penalty really suitable?

    Given their current stock price of $0.38, $100,000 is probably in the same order of magnitude as the market valuation of the company.
  • so they created a product and sold it at cost hoping to make money as an ISP ... unfortunately it caught up with them.

    this should make an interesting trial case for all the discount PCs that require 1-2 year contracts with AOL or some other ISP (and end up costing as-much-as twice what the PC alone would have gone for). could these tactics get the same treatment as Netpliance's?

    _f
  • I still haven't figured out how to crack my iOpener. I think my passwd file has been hacked...

    But hey. Live by the loss-leader, die by the loss-leader.

    /Brian
  • "Netpliance 'greed"

    Those two words right there... says it all.

    - MaineCoon

    PS. I know it was supposed to be "agreed" :-P
  • How about filing under Chapter 51 [satirewire.com]? (from Satire Wire) Maybe that's more appropriate because of the overall stupidity involved.

    --shr3k
  • those assholes at Netpliance got what they deserved. They should have to pay double!

  • Punishment fit the crime (Score:3)

    by GGardner ( 97375 ) on Monday July 02, 2001 @03:22PM (#112596)
    For a company that spent in excess of one milion dollars for a single Super Bowl advertisement, is a $100k penalty really suitable? Or is the penalty small because instant karma has already gotten them?

  • Everybody's doing it (Score:3)

    by joq ( 63625 ) on Monday July 02, 2001 @03:30PM (#112597) Homepage Journal

    Anyone ever take note when they see PC's advertised for say 899.99 there is almost always an asterisk next to the price which includes some kind of connection to either MSN, or Dellnet, or something similar. It's been going on for some time, and you really can't place blame on the advertisers for placing type so small you need a microscope to read it.

    Politicians haven't regulated advertising, and although there are some rules against bait and switch tactics, as well as others, you have to stop and think about whether the consumer actually has a clue when purchasing something.

    Same thing with so called mail in rebates. I used to work in at Grey Direct whose parent co. Grey Worldwide is one of the top ten advertisers in the world, so anyways when there, I remember asking about those mail in rebates, and was told: "Those are placed in hopes people don't bother mailing them in" more or less. I was then told that almost 85% or more of the times no one bothers to mail them in, but they're placed there to attract attention.

    Either way you have to place some blame on the consumer as well for not reading the fine lines, then bitching about getting shafted in the end.

  • What a slippery world... (Score:5)

    by sacherjj ( 7595 ) on Monday July 02, 2001 @03:23PM (#112598) Homepage
    ...where lawyers can twist things so.

    Netpliance agreed to pay a civil penalty of $100,000 and reimburse some customers who had been charged Internet access fees before they used the service.

    Yet...

    Netpliance did not admit guilt

    Here is all the money we took, and an amount to show that we won't do it again, but we really did do anything? Gotta love it.
  • This part of the CNN article disturbed me a little:

    "The company also falsely claimed the i-opener could provide complete Internet functionality, when in fact it could not process multimedia features like digital music and video or run software available over the Internet, the FTC said."

    Complete Internet functionality? That seems like a loaded statement doesn't it? So my Palm VII doesn't count? My Sprint PCS cell phone? My older Linux box (whose sound card didn't work so I couldn't listen to "digital music")? What constitutes "complete functionality"?

  • I was one of those many people who ordered an iOpener, and then they tried to get me to agree to a Terms Of Service agreement before delivery (but after they had my money). I complained to the Better Business Bureau about this, and held on as long as I could.

    I finally took my money back, but told the BBB that the situation had not been resolved to my satisfaction. Looks like my complaints (along with the hundred, or thousands of other would-be owners of counter-top Linux boxen) were heard.

  • NOt internet compatible??? (Score:4)

    by www.sorehands.com ( 142825 ) on Monday July 02, 2001 @03:35PM (#112601) Homepage
    Who says you need to play movies or music to be considered on the internet?

    The article says:

    The company also falsely claimed the i-opener could provide complete Internet functionality, when in fact it could not process multimedia features like digital music and video or run software available over the Internet, the FTC said.
    SO, what is the definition for complete internet compatibility? Windows ME and Internet Exploder?

  • How long ago did this happen? Call your credit card company and dispute the charges.

    ----

  • Nobody admits guilt (Score:4)

    by sulli ( 195030 ) on Monday July 02, 2001 @03:35PM (#112603) Journal
    Typical for a settlement. Admit guilt and you encourage more lawsuits.
  • Often times, companies don't even pay rebates, because they go out of business so quickly. Then there isn't anything you can do about it. Even if you do get the rebate, you have to wait a minimum of 6-8 weeks for it, while they collect interest on your money.

    IMO, rebates are a scam. They serve no real purpose whatsoever, except to occasionally rip people off. Instead of just paying $30 for Age of Empires 2, I have to wait and save up $50, and then wait 3 months for the $20 rebate, just so microsoft can make an extra $0.25 in interest, which doesn't even cover the postage.

    I wholeheartedly support banning of ALL rebates.
  • Forget contact numbers -- a certified mail letter to the CEO of Netpliance (look up the address in the filing on sec.gov or somewhere) is usually good at getting a check out of people like this.

    Calling, emailing, calling and claiming you are recording it, whatever, nothing works the magic like that certified letter, in my experience.

  • This happened to me (Score:3)

    by AirLace ( 86148 ) on Monday July 02, 2001 @04:13PM (#112606)
    I now happily boot Linux off the i-opener EEPROM and get it to mount a root filesystem over the network. However, Netpliance started charging me their monthly fee despite that I'd signed up before they had introduced the mandatory fee. I called them and they were very good about refunding the $60 or so they had already charged me. However, they continued to charge the credit card after that rather scrupulously, and I couldn't even get through to them that time. In the end they got another $60 which I never claimed back, after which they stopped charging me. Even though this was about 60% of the cost of the i-opener itself I decided to let it go as I realised they needed all the cash they could get and I was already getting more value out of the device than the amount they had charged me in whole. However, now that the opportunity has arisen I might do something about it and get my money back. Does anyone have any contact numbers?

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