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Federal Trade Commission Tackles Kmart’s Deceptive Gift Cards

By March 15, 2007June 19th, 2010Internet Lawyer

The U.S. Federal Trade Commission reached a settlement with Kmart over deceptive gift card advertising and sales practices.

Consisting of fine print in ‘legalese,’ the FTC found disclosures of dormancy fees to be inadequate. Kmart assessed the fees after a period of gift card inactivity.

Although this is the Federal Trade Commission’s first law enforcement action involving gift cards, it doesn’t break new ground. It does reinforce the agency’s commitment to full disclosure to the consumer.

Had Kmart disclosed what it was doing in bold print and in plain English (instead of lawyer talk), chances are the FTC would have done nothing. Transparency is one of the best ways to avoid getting in trouble with the Federal Trade Commission. If you have to hide something from your clients, perhaps you shouldn’t be doing it in the first place.

Mike Young, Esq.

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994 and is an angel investor in startups. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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