Business Blog

6(b) or not 6(b): That is the question

Does the IRS have a Form 1039?  Do drivers ever get their kicks on Route 67?  And does 3.14158 ever feel unappreciated because pi gets all the attention?

Most attorneys and business executives are familiar with Section 5 of the FTC Act, which outlaws unfair or deceptive trade practices.  But Section 6 also plays a critical role in protecting consumers.  Specifically, Section 6(b) authorizes the FTC to get information from companies — “special reports” — about certain aspects of their business.

Salient green?

Earth Day is approaching and it’s great when businesses decide to go green.  But if the “green” they have in mind is the hard-earned cash of consumers interested in making wiser environmental choices, companies should remember that well-settled truth-in-advertising principles apply.  The FTC’s law enforcement action against the people behind the “Green Millionaire” promotion emphasizes that point.

Paper, Plastic . . . or Mobile? FTC announces agenda for April 26th workshop

Mobile devices are changing how people go about their daily lives, and that includes how they pay for stuff. As announced in January, the FTC is hosting a workshop on April 26, 2012, to examine the use of mobile payments in the marketplace and their effects on consumers. The workshop — which will be held at the FTC’s Conference Center at 601 New Jersey Avenue, N.W., in Washington, D.C. — is free and open to the public.  The agenda is now available.

Financial literacy makes good business $en$e

Imagine for a moment your ideal customer.  They consider their choices carefully before buying.  They keep their accounts current.  When service is top-notch, they spread the word to friends and family.  If there’s a glitch, they give you a chance to correct the problem before posting thumbs-down reviews.  Now imagine you could “create” your own cadre of contented customers.  Fantasy Land?  It’s more real than you might imagine.

2LEGIT2QUIT?

Last week saw FTC announcements involving allegations of foreclosure rescue fraud, deception aimed at people trying to resell their timeshares, complaints against payday lenders, and lawsuits against outfits claiming to help consumers behind on their car payments.  Is there a theme here?  You bet.  But the message isn't just for companies engaged in practices targeting consumers struggling to stay afloat.  There are words to the wise for businesses of any size and every stripe.

Auto loan modifications? Take note.

Tough federal and state law enforcement has turned up the heat on mortgage foreclosure rescue scams.  So some operators are turning to auto loan modifications to make a fast buck on consumers in financial distress.  In the first cases of their kind filed by the FTC, the agency is alleging that two unrelated California outfits charged hundreds of dollars in upfront fees, based on bogus claims they could reduce consumers’ monthly car notes and help them avoid The Repo Man.

Payday dismay

Take the case of one person who borrowed money from a payday loan operation the FTC has taken to court for allegedly illegal practices.  According to the FTC, the consumer was told that a $500 loan would cost him $650 to repay.  But by slicing and dicing repayments in a way that generated undisclosed fees, the defendants allegedly tried to charge him $1,925 to pay off the $500 loan — and threatened him with arrest when he balked.

Do Not Call Compliance: Don't take it for granted

www.donotcall.govThere are lots of good reasons for businesses to comply with the National Do Not Call Registry:  It ensures your marketing message will be heard by a more receptive audience and it protects your company from the ire of consumers who don’t want to be disturbed.  But in a case involving calls pitching "free" government grants, a federal judge in Rochester, New York, just added 30 million more reasons not to call people on the list.

Data security & COPPA: RockYou like a hurricane

Are there hotter topics these days than data security and kids’ privacy?  An FTC law enforcement settlement with the social networking site RockYou ticks both of those topical boxes and challenges a course of conduct the FTC says made it easier for hackers to access the personal information of 32 million users.  The complaint also alleges the company collected info from kids in violation of the Children’s Online Privacy Protection Act.

FTC releases Privacy Report

In a world of smart phones and smart grids, the smart money is on companies that play it smart with consumers’ information.  Consistent with its 40 years’ experience protecting consumer privacy, the FTC’s just-released Report — Protecting Consumer Privacy in an Era of Rapid Change:  Recommendations for Businesses and Policymakers — underscores that message and outlines a new privacy framework designed for the

Network news

Through a series of recent law enforcement actions, the FTC has articulated what should be apparent:  that truth-in-advertising principles apply to affiliate marketers and to the companies that use them to promote their products.  A settlement announced today by the FTC makes a similarly obvious point: The law applies to affiliate marketing networks, too.

Buyers burned by BurnLounge

If you or your clients work in the multi-level marketing (MLM) arena, a decision by a federal judge in the FTC's lawsuit against BurnLounge, Inc., merits your attention. The defendants — the company, the CEO, and top salesmen — used claims of hefty profits to sell opportunities to run online digital music stores.  According to the FTC, the outfit masqueraded as a legitimate MLM program, but really was an illegal pyramid scheme.

FTC to auto dealers: Back up your ad claims

If you have clients in the auto industry, you’ve seen the ads:  “We’ll pay off your trade no matter what you owe . . . even if you’re upside down.” It’s an attractive claim to people struggling with their finances. But law enforcement settlements announced by the FTC with five dealers from around the country demonstrate the importance of giving people the straight story when making promises about trade-ins where negative equity is involved.

Jurisdiction fiction?

South Dakota can be lovely this time of year, but consumers struggling financially shouldn’t have to travel there to respond to actions filed against them in a tribal court that doesn’t have jurisdiction over their case. That’s what the FTC has alleged in its amended complaint against Payday Financial, LLC, a company that pitches its short-term, high-fee loans in TV ads and online.

I can see clearly now

It’s helpful when advertisers can get a window into the FTC’s thinking about certain ad claims — and five recent settlements with companies that sell replacement windows offer just that.

According to the FTC, the businesses made exaggerated and unsupported representations about the energy efficiency of their windows, and about how much money people could save on their heating and cooling bills by having them installed. What did the ads say? Things like:

Fast forward

Dot Com Disclosures — the FTC’s staff publication about online advertising — was published 12 years ago. Of course, the same basic consumer protection principles apply online, in mobile marketing, and in other media, but a lot has happened since then.  In light of technological changes, is it time for revised guidance about making disclosures required by FTC law?

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