Business Blog

Judge issues Initial Decision in POM Wonderful case

An FTC Administrative Law Judge ruled that POM Wonderful LLC and related parties made misleading claims that POM Wonderful 100% Pomegranate Juice and other products would treat, prevent, or reduce the risk of heart disease, prostate cancer, and erectile dysfunction.  Although the remedy in the case wasn’t everything the FTC staff had asked for, the ALJ concluded that POM had engaged in false and deceptive advertising.

What your ads say and what the science supports: If the shoe doesn't fit...

According to the FTC, Skechers made false and deceptive claims about the benefits of Shape-ups and other Skechers brands.  If you’re in the fitness or health business, the $40 million settlement should grab your attention.  But the underlying principles apply to all advertisers.  If you're looking to get a leg up on substantiation, here are some footnotes to take from the case.

Drip pricing conference in the pipeline

Drip pricing: It may sound like something involving faulty plumbing fixtures, but it's the practice of advertising only part of a product’s price up front and then revealing other charges as the shopper goes through the buying process.

On May 21, 2012, the FTC is sponsoring a Conference on the Economics of Drip Pricing.  The panels of econ profs — boasting more degrees than a thermometer — will discuss empirical analyses of drip pricing and the policy implications for consumers and competition.

A closer look at the Myspace Order: Part 2

Social network site Myspace promised users it wouldn’t share their personally identifiable information in a way that was inconsistent with the reason people provided the info, without first notifying them and getting their approval. The company also said that information used to customize ads wouldn’t identify people to third parties and that Myspace wouldn’t share browsing activity that wasn’t anonymous.

FTC's Myspace case: Part 1

Have you reviewed your company’s privacy policy lately? The FTC’s proposed settlement with social network Myspace serves as a timely reminder to make sure what you tell people about your privacy practices lines up with what actually happens in the day-to-day operation of your business. While you’re at it, double-check to make sure you’re giving customers the straight story about third-party access to their information.

The second time around

Here’s a compliance tip that extends beyond the narrow facts of the FTC case at hand: If you run into legal trouble and are able to avoid law enforcement action, make sure it doesn’t happen a second time. That’s what business people from every sector can take from the FTC’s settlement with James Donofrio and Donmaz Ltd., doing business as New York’s Blair-Mazzarella Funeral Home.

Close-up on disclosures

The FTC just released the preliminary agenda for the May 30, 2012, workshop to consider the need for new guidance for online advertisers about making disclosures. If that’s a topic of interest to your business (and it’s tough to imagine a company not involved in those discussions), you’ll want to stay up on the latest.

What’s on the schedule for May 30th? After a kick-off presentation on usability research, the workshop will feature four panels:

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.

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