Two online companies that promised consumers "free" big-ticket items but required them to pay for trial offers and subscriptions must pay $55,000 in civil penalties under a settlement announced last week by the Washington Attorney General's Office.

Under the terms of the settlement, SubscriberBASE Holdings, Inc., of Columbia, S.C., and SubscriberBASE, Inc., can no longer offer such promotions to Washington residents. The companies also agreed to refund more than 35,000 Washington consumers who paid for products and services in order to qualify for the so-called "free" items.

"There's a reason why folks say 'there's no such thing as a free lunch,'" said Attorney General Rob McKenna. "SubscriberBASE offered 'free' items such as high-definition televisions, digital cameras and laptops, but consumers had to pay more than the items were worth in order to receive them.

"We alleged SubscriberBASE misled consumers into believing that they would be shipped 'free' items worth thousands of dollars, but they first had to provide personal information which the defendants then leased to other online marketers. Consumers were then presented with a series of offers that required increasingly more expensive purchases in order to qualify for the 'free' item. The vast majority dropped out of the qualification process, but only after they had spent significant money.

"The companies' main intent was to collect and sell consumers' personal information to marketers. Under our settlement, the defendants can no longer advertise 'free' gift promotions to Washington residents and cannot use, sell or lease the personal information of Washington consumers in its databases," McKenna said.