Gateway Pays $290,000 to Settle FTC Charges

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Personal computer direct marketer Gateway agreed this week to pay $290,000 as part of a settlement to claims of false advertising made by the Federal Trade Commission. The settlement also prohibits Gateway from misrepresenting its money-back guarantee policy and on-site service provision.


The FTC said that Gateway, North Sioux City, SD, failed to provide money-back guarantees with full refunds and free on-site service to consumers as stated in its ads. Gateway was accused of deducting shipping charges -- which average $62 per customer -- from its full refund to customers and providing on-site service not at the customer's request but only after determining the customer could not make the repair.


Gateway released second-quarter earnings after press time July 23. Piper Jaffray, Minneapolis, expected the company to report earnings per share of $0.39, 5 cents below analyst expectations, on revenues of $1.7 billion.
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