FTC hits bogus benefits claims

By | Website Lawyer | No Comments

Web lawyer claimsHere’s something you might want to discuss with your Web lawyer. There’s a company who advertised the ingredients in its yogurt had certain health benefits. The U.S. Federal Trade Commission (FTC) disagreed, claiming the company had exaggerated what the yogurt could actually do to improve your health.

39 state attorneys general had jumped on the bandwagon going after the company too for making these claims. What would you do in a similar situation with 40 government agencies hunting you down over a claim you made?

The company in this case caved in rather than trying to prove what they said was true. As part of the settlement, the company has to stop making the claims and fork out $21 million. And it will pay out a lot more in the future if caught making a similar “mistake.”

As your Web lawyer can tell you, whether or not you’re right doesn’t matter in some cases. The cost of fighting to prove your point can simply be too much. In other words, even if you “win,” you really lose because of the lost time and money spent fighting.

What does yogurt have to do with your online sales?

The same laws and regulations being used by the FTC and states to go after this company for allegedly making false claims also apply to health claims made for products and services sold online.

The same goes for making earnings (income) claims. Whether the claims are made online or offline, the government is watching.

Be careful what you say. When in doubt, don’t make a claim you can’t back up if the government decides to ask you about it. Of course, any legal issues should be run by your Web lawyer before making health or income claims.

To your online success!

-Mike the Web lawyer

Internet Attorney: Jillian Michaels Lawsuit

By | Internet Lawyer | No Comments

Jillian Michaels lawsuit provides a reminder that your website claims about the results achieved by your products and services can land you in a lot of legal trouble — have your Internet attorney review your website content — beyond what the Federal Trade Commission (FTC) and state attorneys general consumer protection divisions can do to you.

You could face a multi-million dollar class action lawsuit. Here’s an example of how it works.

Fitness guru Jillian Michaels, a star of the television show “The Biggest Loser” has been sued in a California state court for allegedly making false claims on behalf of a weight-loss product. According to the plaintiff in the case, Michaels has claimed “Take two capsules before main meals and you lose weight. That’s it.” This, the plaintiff contends is false and contrary to Jillian Michaels repeated statements to the effect that long-term weight loss requires hard work and discipline.

http://www.youtube.com/watch?v=KhSizjGIURc

This post isn’t about whether Michaels has crossed the line into making deceptive and misleading results claims. It is about the consequences of making any types of results claims for your products and services that an angry client, combined with a plaintiff’s attorney willing to work on a contingency fee, can use to make your life a living hell for the next several years whether or not you did something wrong. In the Jillian Michaels lawsuit, it is likely that she will spend more than $100,000 in legal fees if the dispute goes to trial. That’s not counting damages if she loses or settles out of court. Even if Jillian Michaels wins the lawsuit, the public will remember the allegations rather than the outcome. How much would you be able to pay in legal fees in a lawsuit because you didn’t head off claims by consulting with an Internet attorney before posting content online?

Moral of the story. Learn from the Jillian Michaels lawsuit.  Double check every claim you make about your products and services. If you can afford it (how can you afford not to?), get your website analyzed by your Internet attorney. This includes both your sales page and the testimonials you use in your marketing. When in doubt, you may want to Kill Your Testimonials.

Hat tip: Tom Harvey at the Salt Lake Tribune

Anthony Robbins: Is he right about the recession?

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tony-robbinsMotivational speaker Anthony Robbins* spoke last week for about two hours to a group of speakers and Internet marketers (I represent the group as legal counsel) about the state of the economy. His premise is that the economy cycles in four 15-20 year phases, and each phase is sequential (no skipping). He contends that we entered the current cycle back in 2000. Under this scenario, if Tony Robbins is correct, don’t expect the economic recovery to kick in until sometime between 2016 and 2020.

This is consistent with the Jimmy Carter-type “general malaise” you see in the economy as businesses close, credit spending dries up, and big corporate dinosaurs line up at the government trough asking for taxpayer money. Throw in the Federal Reserve’s doubling of the money supply during the past year and a Congress that puts your grandkids into debt to spend borrowed money now on pork projects, and you’ve got a recipe for a stagnate economy that will give President Obama an FDR economy without four terms and a world war (knock on wood) to turn it around.

That’s the macroeconomic picture. But what’s it mean for your business?

Focus on the fundamentals. Delivering value is going to be key.

Say goodbye to the $5K get-rich-quick packages and hello to lower-cost biz opps that cater to part-time second incomes and work-at-home opportunities. There’s a reason why the Avons and Amways are running commercials right now targeting part-time income seekers. MLMs know that’s what sells in recessions.

Scammers will target this market too, which means the Federal Trade Commission and state attorneys general will be looking more closely at biz opps in that arena to protect the consumer. If you’re really delivering value, this won’t be an issue for you.

Because client loyalty and word-of-mouth referrals are going to be important to survival, be sure to follow up with your clients to ensure that they receive the benefits of what you sold them. If they can’t see a benefit, they won’t buy again and are unlikely to recommend you to others either.

As a final note, consider cherry-picking businesses or assets from those businesses that you want to acquire. There’s a general panic among both brick-and-mortar and Internet businesses right now. There are bargains to be had if you’re willing to take calculated risks.

Photo by Steve Jurvetson

*Disclaimer: No intellectual property claim is made to the terms “Anthony Robbins” or “Tony Robbins.” Any intellectual property rights to such terms belong to Mr. Robbins and/or his companies. Anthony Robbins does not endorse and is not affiliated with this website. References to him on this site constitute fair use, are not for a commercial purpose, and are protected free speech under the First Amendment. No animals were harmed during the writing of this post. Isn’t it ridiculous that a disclaimer is needed?

FTC Attacks Kevin Trudeau for Alleged Misrepresentations

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The U.S. Federal Trade Commission (FTC) has just accused marketer Kevin Trudeau of violating a court order because of claims he’s made about his book, “The Weight Loss Cure ‘They’ Don’t Want You to Know About.” The 2004 court order settled prior charges that Trudeau had made claims for cancer cures and other serious health problems.

Trudeau was banned from using infomercials to sell any product, service, or program. The ban contained a narrow exemption for infomercials for books and other publications, but specifically required that Trudeau not misrepresent the content of the books. The FTC is now charging that he violated that narrow exemption.

Given Trudeau’s long history of fighting with the FTC, my guess is that they’re playing for keeps this time with the contempt of court motion. Regardless of whether you think Trudeau’s stuff has merit or he’s a fraud, the moral of this story is to not make claims that repeatedly put you in the FTC’s consumer protection spotlight.

If you’re selling money-making or health-related products or services, the FTC and state attorneys general pay particular attention to what you sell in order to protect the public. Don’t make unsubstantiated claims. It just isn’t worth it.

Watch this video by John Stossel that covers Trudeau.