http://www.ftc.gov/opa/2011/03/everprivate.shtm

I just saw this settlement come through. If you work in the payday loan space, you’re no doubt familiar with FTC vs. Swish Marketing and Jerry Klein, a.k.a. the “prechecked opt in buried in the footer” case.

Not much to say to the above, other than “ow.” One of the defendants is going to have to pay $350k up front and another $450k in 10 annual installments.

Ow.

Have I mentioned how important it is to work with good compliance counsel, such as my buddy Bill Rothbard from FTC Ad Law?

If you’re marketing online and haven’t had him (or someone like him) review your ads, landers, and processes for compliance, you are doing yourself a huge disservice.

Looks like the FTC has biz opps in the cross-hairs…again. They just announced a major crack down. More information here:

http://www.ftc.gov/opa/2011/03/emptypromises.shtm

About 30 seconds after my buddy Shoemoney linked to my last post, my inbox was flooded with questions about the Restore Online Shoppers Confidence Act.

Unfortunately, my lawyer has advised me to not directly answer any questions. This could have something to do with the fact that I am not an attorney or because he knows that I love to talk out of my ass all the time. Either way, I’m not going to be able to answer them.

The good news is you can hop back over to Shoemoney’s site to read a fantastic guest post by Bill Rothbard. Mr. Rothbard is a fantastic FTC compliance attorney that I’ve had the pleasure of speaking with a number of times. (If you’re going to ASW, look for him on a compliance panel or two.)

-Joe

Yeah, that’s right! Even airlines are playing the forced upsell game. I just booked a flight on Allegiant. I added preferred boarding and seat selection, got my subtotal and when I submitted to the payment processing page, I noticed the cost had increased by $15.98.

Hmmm, I thought. I don’t remember authorizing that.

Sho’ nuff, Allegiant had opted me in to their TripFlex coverage, which allows for flight rescheduling without change fees if you buy it ahead of time. Why, that was nice of you, Allegiant. With this type of dedication to the best interest of your consumers you guys should really consider getting into the acai berry negative option space. Really.

Allegiant – if you want to force upsells like the best of the internet filth you should’ve at least posted the price change on the previous screen, when I selected my seat. That way I never would have known.

-Joe

P.S. Mind hooking me up with your processor?

Are you job hunting and worried that an employer might reject you because of bad credit? Lots of employers are doing credit checks nowadays. Well, according to this recent testimony by the FTC, employers are required to inform you that they are running your credit and, more importantly, they have to let you know if they take any “adverse action” as a result of the information they obtain on your credit report. (In this case, “adverse action” could simply be not hiring you because of your credit.)

The FTC is the main federal agencies in charge of consumer protection. One of their big Truth in Advertising tests is called the “reasonable consumer” standard. When selling a product, you are only allowed to make representations that an average Joe (“reasonable consumer”) would find to be accurate. If you are making promises or representations that the average Joe would find misleading once they buy your product, you are violating the reasonable consumer standard. This is a critical test in Truth in Advertising compliance.

An example: You are selling a credit repair service that will “improve your credit with this simple call!” Unless you can actually improve someone’s credit with a phone call (which you can’t), you are violating the reasonable consumer standard. You are being deceptive and violating Truth In Advertising. Here’s why: Consumers will expect to have their credit score increased with that call, per the terms of your advertising. If you cannot deliver as promised, you are misrepresenting your product and breaking the law. (Businesses used to argue “well, the call initiates our credit repair service, which over the course of time will improve your credit.” FTC has shot down that defense repeatedly.)

While watching some local news, I wondered: Why are we not holding our politicians and PACs to the same standard that we hold businesses? Should they not be held liable for the accuracy of their advertising?

We live in a sound bite culture. I would guess that 90% of Americans don’t take the time to think critically about the message their representatives are sending with intentionally deceptive political ads.

If the government is going to protect consumers from being misled in business, should they also not work to protect consumers from intentionally deceptive political advertising?

Here’s yet another case in which the FTC teamed up with a BBB office to go after a company generating lots of consumer complaints. I’ve heard through my counsel that the FTC and AGs are starting to surf Rip Off Report and BBB sites to find businesses to target…here’s the latest evidence of that.

FTC vs. Interest Rate Reduction Scams

If you’re unconcerned about your little product or site generating BBB complaints, it might be time to re-evaluate. AGs and the FTC need to generate revenue in order to operate, and in these tough economic times you just might find yourself the target of some scrutiny.

Disclaimer: I am not a lawyer and this should not be construed as legal advice. If you are concerned you should hire a lawyer and get their opinion.