In addition to the federal consumer protection laws enforced by the Federal Trade Commission (FTC), you have to be concerned with similar laws in each state where you do business. Talk with your Internet lawyer about these legal risks.
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. Even if your Internet lawyer helps your litigator win these cases for you, you still lose because of the legal fees you’ll spend.
Let’s use the Texas Deceptive Trade Practices Act (DTPA) as an example of why consumer suits under state laws are so attractive whether or not the Federal Trade Commission has taken action.
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
* Attorney fees
After being hit by the Federal Trade Commission, it doesn’t take many of these state consumer protection lawsuits to bankrupt a business. Consult with your Internet lawyer to reduce the chances you’ll get nailed for deceptive trade practices.