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Federal Trade Commission and Predatory Payment Practices

By Internet Lawyer

Like other businesses, Internet marketers get into Federal Trade Commission (FTC) trouble when their payment terms aren’t idiot-proof. When in doubt, assume your consumer has a fourth grade education and barely understands how to order and pay for a meal at a fast food restaurant.

If your buyer thinks, mistakenly or not, that he paid too much for your value combo, he suddenly becomes smart enough to file a complaint with the FTC.

To be sure, there are unfair, deceptive, and fraudulent online payment practices, but commonly complaints arise because of buyer’s remorse (second thoughts about what was just purchased) or because the buyer didn’t fully understand the transaction.

Here are some typical payment complaints to the Federal Trade Commission.

* Goods or services were purchased via the Internet but were not delivered as promised.

* Vendor refused to honor a money-back guarantee.

* Multiple credit card billings were made for a single item.

* Hidden fees were built into the sale.

* Subscription services couldn’t be canceled and the automated billing continued. FTC inquiries into your financial dealings can include issuing a CID for your bank records. For example, BlueHippo Funding, LLC provides credit for purchases of computers and other equipment. On December 13, 2005, the FTC denied BlueHippo’s request to exclude its bank records from examination in an investigation.

In another case, on November 21, 2006, the FTC obtained a court order against a group selling Internet Service Provider (ISP) and web design services. The order permanently barred the defendants from making misrepresentations when selling, prohibited the defendants from billing consumers without first obtaining their consent – which they must record – and provided strict rules they must follow to ensure that consumers the defendants call were protected from fraud and deception. Finally, the order established a program through which defrauded consumers could obtain refunds.

Don’t let your business be subjected to a Federal Trade Commission investigation or lawsuit because of alleged financial misconduct.

Communicate. Communicate. Communicate. Excellent client service should resolve most buyer’s remorse issues and full disclosure of payment terms and conditions, including any limitations on money-back guarantees, will go a long way to taking care of other dissatisfied clients.

Federal Trade Commission Consent Orders

By Internet Lawyer

Dealing with a Federal Trade Commission investigation or lawsuit can be a lengthy and expensive event for you. Few businesses can afford to fight the FTC.

In addition to the legal fees, there are the lost opportunity costs. Every moment you spend dealing with a government investigation or lawsuit is one less that you can spend on growing your business.

The Federal Trade Commission knows this…and now you do too.

Many business owners find that it is less damaging to settle with the FTC than to fight regardless of the merits.

Although FTC investigations are usually non-public, it is a different story for trials and consent orders. If you and the FTC decide to settle, a proposed consent order with the settlement terms is published for public comment. After 30 days, the FTC can make it a final settlement.

If you subsequently violate the consent order, the Federal Trade Commission can go to court to enforce it.

The good news is that you don’t have to admit liability in a consent order.

Unfortunately, it doesn’t end there.