Canada Post Offers Refunds for Internet CDs

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Canada Post Corp. is offering refunds to 140,000 consumers who bought a $9.95 CD-ROM promising free Internet service for life through its postal outlets in 2001.

The offer came just before a Quebec Superior Court judge set an early November start date for a class-action lawsuit involving the CD-ROMs by about 35,000 plaintiffs against Canada Post and co-defendant CyberSurf Corp.

Paul Unterberg of the firm Unterberg Labelle Lebeau & Morgan in Montreal, who is handling the suit on behalf of the buyers, said Montreal resident Michel Lepine initiated the suit. Lepine had bought one of the Internet-access kits in 2001 at his local postal outlet. The kit promised free Web access, but three months later a pop-up window appeared on his screen advising him his service would be terminated unless he paid $9.95 per month.

Lepine and other plaintiffs seek reinstatement of their free Internet connection or $23 a month for life. They also want $250 each in punitive damages.

An executive for CyberSurf, Calgary, did not return calls. Insiders said the company had planned to generate revenues by selling advertising on its home page. When advertising dollars evaporated after the dot-com crash, the company could not sustain itself, so CyberSurf sent pop-up ad messages to people using the service, informing them that the service would be switching from free to a monthly fee.

Canada Post is offering to refund the original purchase price, plus tax, to anyone who bought the kit at one of its outlets from January to July 2001. Customers must return the original CD-ROM to get the refund. They also must sign a form that they have been refunded and that they want three months of free Internet service.

"Why didn't they think of this at the time that they shut down the system, instead of a year and half later?" Unterberg said. "Why did they wait for a class-action before making an offer?"

Canada Post said that the refunds have nothing to do with the class-action lawsuits. It claims it was merely a distributor of the product and has no responsibility for the offer of free Internet service.

"We thought refunding the cost of the purchase would be in the best interest of satisfying our customers," Canada Post spokesman John Caines said.


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