Gateway sued over claims of “free” Net access

Gateway Inc. was charged with slippery Internet practices Wednesday in a class action lawsuit filed in the Superior Court of the State of California, County of San Diego. Among other claims, the lawsuit alleges that Gateway mislead customers when it offered free Internet access while not revealing that many users might incur long-distance telephone rates when connecting to its service.

The suit looks to prevent Gateway from continuing with its allegedly deceptive practices and to stop it from collecting reimbursement from the users represented in the lawsuit. The suit also seeks monetary compensation for users affected by Gateway’s actions, as well as repayment of Gateway’s allegedly ill-gotten gains.

A Gateway spokesman reached late this evening declined to comment.

According to the lawsuit, Gateway promised free Internet access to users who purchased the company’s products but did not warn customers that many people fell outside of the provided local access numbers, which meant that they paid long-distance fees for connecting to the Web.

The complaint additionally alleges that a separate class of customers were defrauded when they chose to finance purchases with Gateways “Moola MasterCard” plan. The annual percentage rate in the plan stands at 26.99 percent, and was allegedly disclosed to users only after they could no longer return goods for a refund.

The suit charges Gateway with violating the California Legal Remedies Act and the California statute prohibiting fraudulent and unfair business practices and false and misleading adverting. It was filed by two law firms: Milberg Weiss Bershad Hynes & Lerach LLP, and Almon, McAlister, Baccus Hall & Kelley, LLC.

The lawsuit seeks to represent individuals who bought Gateway products using a “Moola MasterCard,” and/or those who signed up for one a free one-year Internet connection and could only access the Internet, under Gateway’s plan, through a long- distance connection, the law firms said in a statement.

It will be up to the San Diego Superior Court to determine whether the lawsuit merits class action status.

Gateway, based in San Diego, California, can be reached at

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