In addition to the federal consumer protection laws enforced by the FTC, you have to be concerned with similar laws in each state where you do business.

Like sharks detecting blood in the water, a high publicity FTC court judgment or settlement attracts people who like to sue for violations of state consumer protection laws. You may even be investigated by a state attorney general’s consumer protection office.

If you are perceived to have deep pockets (a lot of money), chances are one or more consumer lawsuits will be filed in state courts.

Let’s use the Texas Deceptive Trade Practices Act (DTPA) as an example of why consumer suits under state laws are so attractive.

In some circumstances, a successful DTPA consumer plaintiff can get the following in court:

* Economic damages, including repair or replacement costs

* Damages for mental anguish, pain, and suffering

* Punitive damages that may be up to three times actual damages

* An injunction that stops you from selling the product or service

* Restitution

* Attorney fees

After being hit by the FTC, it doesn’t take many of these state consumer protection lawsuits to bankrupt a business.

About the Author

With an advanced international law degree from Georgetown University and more than 14 years of real world legal experience, Attorney Mike Young shows entrepreneurs how to protect and grow their businesses online. He's the author of Internet Marketing Legal Secrets Revealed. Not just a lawyer who focuses exclusively on Internet and marketing law, Mike’s been working with computers for more than 27 years (his first computer was an Atari 400 with 8 KiB RAM) and started representing Internet businesses back in 1996.