When it comes to the U.S. Federal Trade Commission (FTC), don’t think that you can stick your head in the sand and hope the government ignores the way you do business. BlueHippo is an example of what happens.
The company has been forced into bankruptcy when the bank processing its payments froze its funds. The company has been accused of violating its settlement with the FTC over deceptive sales of computers and other electronics via layaway. Whether or not this is true is irrelevant. The fact remains that Blue Hippo has been nailed by both the Federal Trade Commission and state consumer protection agencies for allegedly engaging in deceptive trade practices.
As I remind clients, the best website legal documents will never eliminate all risk but just reduce exposure for most claims. One who violates the law doesn’t get a free pass (e.g. selling acai berry cancer cures online or get-rich-quick scams) because of great terms of service or a privacy policy.
Yes, you should put fundamental protections in place through your website legal documents, particularly with the new FTC guidelines effective December 1, 2009. If you can’t afford to pay for customized documents prepared by an Internet lawyer, then you’ll at least want to use website legal forms prepared by one.
Ultimately, you have to deliver at least what you promised, provide value, and treat your clients right. If you make any effort in client service, you’ll exceed expectations because many Internet business owners simply take the money and run. Don’t become a Federal Trade Commission poster child of what not to do.
