Fun_People Archive
6 Jan
Free money from Bill gates! $400!

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From: Peter Langston <psl>
Date: Thu,  6 Jan 100 01:03:15 -0800
To: Fun_People
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Subject: Free money from Bill gates!   $400!
References: <v03110700b497cd09d438@[]>

X-Lib-of-Cong-ISSN: 1098-7649  -=[ Fun_People ]=-

[Another hoax?  Sound too good to be true?  Maybe so, but read on...   -psl]

Forwarded-by: Mark James <>

  MS gives Californians $400 each to buy computers

Microsoft is giving Californians a $400 gift to help them buy computers,
according to the estimable San Jose Mercury. Of course, this isnt happening
by design - it's just a strange coincidence of MSN incentivisation and
Californian consumer law.

It works like this. When shopping at Best Buy and a few other stores, you
sign up for a three year MSN contract and get your $400 discount voucher.
Elsewhere in the US (excepting Oregon) you have to give the $400 back if
you cancel, but Californians, as we all know, are different. The 00
qualifies as "purchase credit, says the Mercury, which is covered by a
California law which says you can't be forced to purchase anything in
connection with taking out a loan.

The law was put in place to stop consumers being forced to buy insurance
when they bought a car or a house, but apparently it works for computer gear
as well.

A nasty, unfortunate and unexpected accident for Microsoft? Well, possibly
not.  The printed terms and conditions for the offer in the US as a whole
are different from those in California and Oregon, so it appears Microsoft
legal department was aware of local legal conditions. The general form small
print says you've got to pay MSN back the rebate if you cancel, while the
California/Oregon version doesn't mention this.

Which would probably be OK for Microsoft (or maybe just MSN - IPO it quick)
if people didn't know they could just walk into a store and get $400 for
free, but unfortunately, now they do. A Microsoft spokesman told the Mercury
that the deal was such great value he didn't expect to see many people
canceling, but Microsoft spokesmen are like that. (Mercury story) (r)

Mercury News story January 5, 2000

Law gives an `out' to Best Buy MSN deal

BY DEBORAH KONG Mercury News Staff Writer

If you're ready to spend hundreds of dollars at a Best Buy electronics and
appliance store -- or at some Bay Area office supply superstores -- you can
instantly trim your bill by $400 if you sign up for three years of
Microsoft's MSN Internet access.

In most of the rest of the country, if you cancel the $21.95-a-month plan
before the three years are up, you'll have to repay MSN the full $400.

But Californians can cancel any time and never have to pay the company back.

That's because Microsoft is actually lending the customers the $400
``purchase credit.'' The company said that triggers a state law that says
people cannot be forced to purchase anything in connection with taking out
a loan. The 5-year-old California law was intended to protect consumers from
being forced to buy property insurance when they get mortgages, or having
to buy car insurance through a car dealer that financed their vehicle.

``It's weird,'' said a Best Buy sales representative in Milpitas, who
declined to give his name. ``MSN eats that $400.''

But Microsoft defends the program, which it is also offering at Staples,
OfficeMax and Office Depot. It says it has not seen many cancellations in
California or Oregon, where the same kind of rule applies.

``We took what we believed were prudent steps to comply with the law, which
allows us to make this very popular offering to California and Oregon
consumers,'' said Microsoft spokesman Tom Pilla.

The Microsoft program lets people instantly save $100, $225 or $400 on any
purchase at Best Buy or the other stores if they agree to sign up for one,
two or three years of MSN Internet access.

To get the savings, which are subsidized by Microsoft, customers must be 18
or over, have a major credit card and sign up for the Internet access when
they're making their purchase. They must also spend at least $100, $225 or
$400, depending on which of the three plans they choose.

Terms of the deal

The difference for California and Oregon residents is in the small print
under the terms and conditions of the deal.

For customers outside those two states, the small print reads, in capital
letters, ``If for any reason whatsoever you do not continue for the period
of time specified above for the rebate you have elected to receive, you
agree that you will repay MSN the amount of the rebate . . .  immediately
upon cancellation or termination of your MSN Internet access account.''

But a separate application form for California and Oregon contains no such

A Best Buy ad says the savings apply only to computers, but Best Buy and
Microsoft officials said customers can actually use the offer for any
product in the store. Pilla said customers at Staples, OfficeMax and Office
Depot can also use the discounts toward any purchase and that Californians
would not have to repay MSN if they canceled the Internet service.

A Best Buy spokeswoman referred questions to Microsoft, which in December
invested $200 million in the company. The Staples Web site had both versions
of the application form, and customers must request the ``purchase credit.''
A sales clerk at OfficeMax said customers who cancel service would not have
to repay MSN; a clerk at Office Depot said he did not know. An OfficeMax
clerk said customers must also request the credit by mail; at Office Depot
a clerk said it was given instantly at the cash register.

No strings attached

While $400 off refrigerators, camcorders, PCs or other items -- with no
strings attached -- might seem like a great deal for consumers, one might
wonder if it's such a good bargain for Microsoft.

But Microsoft's Pilla said the company isn't worried about people canceling

``Our experience to date is that it's been a very popular program,'' Pilla
said. ``We haven't seen that . . . and we don't expect to see that,
basically because we think that the value that we're offering customers, as
we've seen from the many sign-ups, is tremendous.''

Pilla declined to say just how many consumers have signed up for MSN
Internet service through the rebate deal, or how many have canceled service.
With 2.7 million subscribers, MSN claims to the second-largest Internet
service provider behind AOL, which also owns CompuServe.

The Microsoft deal is similar to one CompuServe offers. But CompuServe does
not say it is lending that money to customers, requiring consumers in every
state to pay back the rebate if they cancel CompuServe Internet service.

Under the CompuServe offer at retailers such as CompUSA, Circuit City and
Office Max, consumers get $400 off computers if they agree to sign up for
three years of CompuServe's $21.95-a-month service. (At Circuit City, the
rebate applies to all products, not just computers.)

But if they cancel the service before the three years is up, they have to
pay a $50 cancellation fee plus a pro-rated amount that depends on how long
they've had the service. ``You're making a commitment like you would with
your cellular phone,'' said CompuServe spokeswoman Anne Bentley, referring
to plans in which wireless carriers give consumers free or discounted mobile
phones if they sign a contract for a year or more of service with certain
rate plans.

Reviewing the issue

Bentley said CompuServe's legal department is looking into the issue of
requiring consumers to pay back the rebate.

``We're absolutely going to work in accordance with any state banking or
other laws,'' she said.

A spokeswoman for California's Department of Corporations said it was
unclear whether Microsoft and CompuServe's programs would fall under the
state lending law.

Consumer advocate Ken McEldowney of San Francisco-based Consumer Action said
people should steer clear of service plans that lock them into rates for a
number of years. The $21.95-per-month charged by MSN and CompuServe is the
same as industry leader AOL, but more expensive than other providers, some
of which offer dial-up access for free in return for agreeing to watch

``People have the potential to get suckered into something where they're
sort of captive customers and they end up, because of the contract . . .
losing out on what would be a better bargain in the future,'' he said.
``There really is the danger that there's going to be a better buy out

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