Have you ever been duped by an offer to get something for free only to find out later that you have to pay something? A lot of people have and that is why a trio of New Jersey lawmakers has introduced legislation to outlaw misleading advertising of free products. The measure has been dubbed the "Free Means Free Act."

(Jakub Jirsák, ThinkStock)

For co-sponsor, Assemblyman Charles Mainor (D-Jersey City) the legislation is personal because he was recently duped.

"The reason this bill came about is I received a phone call stating that I was eligible for a free upgrade of my cell phone, and when I went there they told me that the phone upgrade was going to cost me $200 for a $600 phone," Mainor said. "I understood the cost of $200, but what I didn't understand was the $400 balance was being added to my bill for the next two years and I think that's wrong."

Specifically, the bill (A-3892) prohibits advertising, offering or selling free products if the company or person:

  • Charges a return or restocking fee for the return of the product or sold in conjunction with the free product;
  • Assesses a cancellation fee for early termination for a contract and the fee incorporates any actual value or cost of the product;
  • Includes any amount to cover the cost of the product within the bill a customer gets for the contracted service.

The bill is co-sponsored by Assemblymen Paul Moriarty (D-Turnersville) and Pat Diegnan (D-South Plainfield).

"Advertisements that claim a product will be given away free take advantage of consumers in need," Moriarty said in a press release. "Many families are still struggling to make ends meet in this economy. It's deceptive and unfair to consumers who work hard for every dollar earned to be misinformed and then nickel-and-dimed with extra costs."

The legislation also requires companies to clearly and conspicuously detail any and all possible fees related to the so-called free product, disclose the retail value of the product and clearly state if the free product is included as part of a service contract.

"I am sure that the reputable businesses of New Jersey will welcome this common sense legislation," Diegnan said in an emailed statement. "Free should mean exactly that - free. Any added costs or required purchases should be clearly stated in the advertisement."

If the bill becomes law, anyone who violates it would be subject to the penalties covered under the Consumer Fraud Act. This could include a fine of up to $10,000 for a first offense and up to $20,000 for any repeat offenses. The State Attorney General could also issue a cease and desist order and a judge could assess punitive and other damages.