Internet Marketer to Pay $200,000 to FTC For Deceptive Advertising
An online marketer settled FTC charges against it by agreeing to provide consumer-friendly disclosures and paying $200K to the U.S. Federal Trade Commission (FTC). In addition to allegedly violating the CAN-SPAM Act by sending spam e-mails, the company was accused of advertising free products that in fact required consumers to jump through a bunch of hoops by paying for other products or services or otherwise incurring obligations (such as having to apply for credit cards) in order to receive the “free” gifts.
What’s the importance of this decision? It emphasizes that the federal government will continue to make examples of those who engage in anti-consumer practices. As a general rule, there’s nothing wrong with offers that contain “free” products or services. But that requires clear disclosures so that no one is fooled into thinking the offer has no strings attached. In addition, one needs to pay special attention to the laws governing unsolicited commercial email (spam). No one likes spam. It is bad marketing and it is against the law.
If you have questions about what is legal and isn’t, you should consult your Internet attorney before engaging in an activity online. It doesn’t do your business good to make a profit selling something only to have it taken away in government fines and legal fees defending yourself from allegations of wrongdoing.
Hat tip to InfoWorld.
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.
Chris Lockwood | Apr 30, 2008 | Reply
Hey Mike,
This makes me wonder about the free ipod offers and so on that involve jumping through lots of hoops and signing up for some not-free offers to qualify. Would those fall under the same laws as this situation?
Mike Young | May 1, 2008 | Reply
Chris,
It depends on how the systems are set up. Most are operating in the gray area. A few cross the line into flagrant deceptive business practices and the FTC makes an example of them.
Like hidden continuity programs, just one more abuse of online marketing that raises red flags that invite the government to assert more regulatory control over the long term. A few bad apples with a get-rich-quick mentality spoil the whole online barrel.
Best wishes,
-Mike