A company in Canton, Ohio that sells fireplace products could cause a blip in TV sales, owing to the law of unintended consequences. The company — Heat Surge LLC — has placed ads in newspapers throughout the country, touting "free TV without Gov’t coupon." Apparently, however, the only thing free about it is the broadcast signal you can receive. Offering DTV converter boxes under the "Universal Techtronics" and "Miracle Clearview" brands, the company claims to offer "new TV boxes free to everyone" who responds to the offer. The gotcha is in the smallprint — unsuspecting buyers are forced to subscribe to a 5-year "warranty" that, together with shipping and handling charges, can add up to almost $100. Newspapers around the country have already picked up on the story, calling it a "DTV converter box scam."

Aldo Cugnini
Analyst

The real converter box program, of course, helps consumers buy up to two certified DTV boxes, with government-issued coupons that will defray up to $40 on each box — resulting in a cash outlay of as little as about $10. Officials at the government bureau managing the coupon program, the National Telecommunications and Information Administration (NTIA), are looking into the possibility of fraud and violation of federal law. Already, the Better Business Bureau has reported problems with the company, which also sells electric fireplaces having "Authentic Amish Crafted Premium Wood Mantles." The company has come under fire in more than 200 filed complaints.

Heat Surge, originally listed as a certified coupon retailer, has had its certification revoked by the NTIA, because its "advertising was misleading and was selling the boxes under a non-approved name," according to NTIA spokesman Todd Sedmak. Apparently, the ads show a box with the brand "Universal TechTronics," which has not been certified by the NTIA—even though the box looks like a converter made by the company Sansonic. Lawyers for Heat Surge, on the other hand, say their boxes are made by Philco, and company officials insist the ads are not misleading.

The problem, of course, is that many unwary buyers will end up paying much more than they should. There are already concerns that many people are not fully educated about the transition — and this kind of ad will only increase the confusion. "They’re really targeting the senior citizens who are going to be confused and not up-to-date on the technology," said Alison Preszler, a spokeswoman for the Council of Better Business Bureaus.

But the opposite could happen, too. Consumers who read the press about scams may be scared away from buying any converter box at all — with the result that they will either go to cable or satellite, or perhaps will go out and spend the additional bucks for an integrated DTV set.

Also, in an unrelated event, Dish Network has finally released its long-awaited "DTV Pal" converter box, at a price of $59.99. Originally called the model "TR-40," the box was widely touted to have a price of $39.99 — making it "free" before tax. So much for letting the air out of that balloon. Let’s hope that July is a better month for the DTV transition, with the right kind of fireworks.