Their lines of work are as different as can be: an HVAC and electrical contractor, a flooring seller, and a company that takes people on horseback rides. But according to the FTC, they have one thing in common. They all violated the Consumer Review Fairness Act. Read on for details about the FTC’s first cases solely enforcing the CRFA, the form contract provisions the FTC says contravened the law, and tips for keeping your contracts CRFA-compliant.
Blog Posts Tagged with Advertising and Marketing
Where do entrepreneurs go if they’re long on ideas, but short on capital? In their short history, crowdfunding platforms have often been the financial sparkplug that ignites the engine of innovation. But some campaigners promote zealously and deliver zilch. According to the FTC, a company raised over $800,000 in four crowdfunding campaigns for a high-tech backpack and other items, but used a large portion of the money on personal expenses.
When a company settles a case with the FTC, it’s not just water under the bridge. An FTC administrative order includes provisions designed to prevent similar deceptive or unfair practices in the future – and violations of those orders may result in civil penalties. The FTC just announced a proposed settlement with Georgia-based iSpring Water Systems for violating a 2017 order related to the company’s Made in USA claims.
“Viagra for the brain.” It’s a slogan designed to attract the attention of consumers concerned about cognition. Then there was a massive online ad campaign of “news” websites featuring supposed testimonials from people like Bill Gates and the now-late Dr. Stephen Hawking. It’s no wonder people forked over millions for supplements that went by names like Geniux, Xcel, EVO, and Ion-Z.
Gamers call them loot boxes – in-game rewards players can buy that contain a random assortment of virtual items. The loot may help players advance in an online game or allow them to customize their avatars. The rewards may be virtual, but they’ve become a very real revenue stream for game developers.
Is there anything you can’t get delivered to your front door? (And yes, home renovators will attest you can even get a front door delivered to your front door.) The burgeoning subscription model can offer convenience to customers, but only if companies honor established consumer protection principles.
Remember the old Superman movie where the Man of Steel squeezed carbon in his hand to create a diamond? That’s not how it’s done, but these days not everything sparkly comes from a mine. In addition to mined diamonds, consumers can choose simulated diamonds or diamonds created in a laboratory. What matters to consumers – and the FTC – is that companies accurately describe what they’re selling.
To many Americans, the phrase “We support our troops” is more than just a bumper sticker. They put their money where their heart is and contribute to organizations that benefit members of the military – or police officers, first responders, or others who serve. Their generous intent shouldn’t be undermined by sham charities that allocate the lion’s share of donations not to promised services, but to telemarketing, salaries, and other overhead.
It’s an illegal practice the FTC has challenged for decades: companies convincing consumers to pay for “repairs” on products that don’t really need fixing. The FTC alleges that Office Depot and service vendor Support.com engaged in a 21st century version of that misleading tactic. According to the complaint, the defendants tricked customers into spending millions on repairs by deceptively claiming they had found malware symptoms or infections on consumers’ computers.
The FTC focuses most of its time and attention on protecting consumers and promoting competition. Every so often, we stop and take stock. For example, check out our just-released Annual Highlights for a detailed round-up of some of the FTC’s 2018 consumer protection accomplishments.
The FTC just announced developments in the ongoing fight against illegal robocalls. “But my company would never place illegal robocalls,” you say. Glad to hear it, but there are four reasons why reputable businesses should still take note when the FTC brings actions against robocallers.
If you sell genetic testing kits to consumers, you’re probably familiar with the Genetic Information Nondiscrimination Act (GINA), which prohibits discrimination on the basis of genetic information under some circumstances. You’re also familiar with the Health Insurance Portability and Accountability Act (HIPAA), which protects health information collected by certain types of entities. Then there are laws enforced by the FDA and the Centers for Disease Control and Prevention that pertain to genetic testing kits.
First, the bad news: That nifty purchase needs a repair. Now the good news for consumers: It’s still under warranty. But where can they go to get it fixed? Can the manufacturer restrict a consumer’s ability to go to the independent repair shop of their choice? Can the manufacturer use glue, non-standard screws, and proprietary diagnostic software that make it difficult for independent repair shops to fix things?
The FTC’s ability to obtain information through subpoenas and civil investigative demands (CIDs) is critical to the task of investigating potential law violations. The FTC uses this authority deliberately and responsibly, avoiding unnecessary burdens on businesses and individuals and consistent with our obligations to enforce the law.
Every year, millions of consumers tell us – and our partners – about the frauds they spotted. In 2018, we heard from 3 million people and learned a lot from the reports entered into our Consumer Sentinel database. Here are some notable facts from the Consumer Sentinel Network’s 2018 Data Book – including that a new category of scams has earned the unenviable right to chant "We’re #1."
In explaining FTC cases, we try to give readers a behind-the-scenes perspective and sometimes the most accurate insights are out of the mouths of corporate insiders. In the FTC’s first case challenging fabricated reviews on an independent retail site, consider an email from the CEO of Brooklyn-based Cure Encapsulations about a weight loss pill it was selling.
For people looking for highly-paid executive positions with private equity or venture capital firms, Worldwide Executive Job Search Solutions and PrivateEquityHeadhunters.com claimed to offer the inside track to the suite life.
The name of the case is FTC v. Fat Giraffe Marketing Group, but the lawsuit has nothing to do with obesity, giraffes, or obese giraffes. OK, perhaps there are some similarities in the sense that the defendants made oversized claims, told tales as tall as tree-topping ungulates, and used protective coloration – in this case, bogus endorsements – to camouflage what they were up to.
Just in time for Valentine’s Day, the FTC staff released a Data Spotlight highlighting the category of scam with the highest amount of reported financial loss among complaint categories the FTC uses to track fraud. The category may surprise, but here’s a hint. In the words of Bon Jovi, these con artists “give love a bad name.”