www.ifrahlaw.com www.ifrahlaw.com
MO’ MONEY, MO’ PROBLEMS –
SCRUTINIZING FTC SETTLEMENTS
Affiliate Summit East 2014
Rachel...
www.ifrahlaw.com
Meet The FTC –
The “Notorious” F.T.C.
P (202) 524-4145 /
“Independent” Federal Agency 5 Commissioners/ 7-...
www.ifrahlaw.com
Meet The FTC – Bureau of Consumer Protection
The “Notorious” F.T.C.
P (202) 524-4145 /
Division of Advert...
www.ifrahlaw.com
Meet The FTC – Bureau of Consumer Protection
The “Notorious” F.T.C.
P (202) 524-4145 /
www.ifrahlaw.com
Know The Law –
Ain’t Nuthin’ But An FTC Thang
P (202) 524-4145 /
As the nation’s consumer protection agen...
www.ifrahlaw.com
Know The Law –
Ain’t Nuthin’ But An FTC Thang
P (202) 524-4145 /
The FTC Enforces Consumer Protection Sta...
www.ifrahlaw.com
Respect The Law – Avoid FTC Scrutiny
“Too Legit To Quit?” Or “Slim Shady?”
P (202) 524-4145 /
www.ifrahla...
www.ifrahlaw.com
Know the Process – What Makes You A Target
“Can’t Touch This?”
P (202) 524-4145 /
Anyone Who Is Engaged I...
www.ifrahlaw.com
Know The Process – What Makes A Good FTC Case
“Dollar, Dollar Bill Y’All”
P (202) 524-4145 /
www.ifrahlaw.com
Know The Process – Top FTC Enforcement Priorities
“It’s Hammer Time!”
P (202) 524-4145 /
Protecting Consu...
www.ifrahlaw.com
Know The Process – FTC Enforcement Trends
“It’s Hammer Time!”
P (202) 524-4145 /
2010 2011 2012 2013
Iden...
www.ifrahlaw.com
Know The Process – How An FTC Case Develops
“Don’t Hate the Player, Hate the Game”
P (202) 524-4145 /
Sta...
www.ifrahlaw.com
Know The Process – How An FTC Case Develops
“Don’t Hate the Player, Hate the Game”
P (202) 524-4145 /
Tar...
www.ifrahlaw.com
Know The Process – How An FTC Case Develops
“Don’t Hate the Player, Hate the Game”
P (202) 524-4145 /
INI...
www.ifrahlaw.com
Know The Process – How An FTC Case Develops
“Don’t Hate the Player, Hate the Game”
P (202) 524-4145 /
RES...
www.ifrahlaw.com
Know The Process – How An FTC Case Develops
“Don’t Hate the Player, Hate the Game”
P (202) 524-4145 /
Set...
www.ifrahlaw.com
Know The Process – How An FTC Case Develops
“Don’t Hate the Player, Hate the Game”
P (202) 524-4145 /
Ent...
www.ifrahlaw.com
Understand The Results – FTC Settlements
“Ain’t Nuthin’ But A Gold Digger”
P (202) 524-4145 /
Health And ...
www.ifrahlaw.com
Understand The Results – FTC Settlements
“Ain’t Nuthin’ But A Gold Digger”
P (202) 524-4145 /
Financial S...
www.ifrahlaw.com
Understand The Results – FTC Settlements
“Ain’t Nuthin’ But A Gold Digger”
P (202) 524-4145 /
Telemarketi...
www.ifrahlaw.com
Prep Your Team– When The FTC Comes Knocking
“Mama Said Knock You Out!”
P (202) 524-4145 /
Educate Employe...
www.ifrahlaw.comwww.ifrahlaw.com
1717 Pennsylvania Avenue
Washington, D.C. 20006
www.ifrahlaw.com
P (202) 524-4145 /
Email...
Upcoming SlideShare
Loading in …5
×

Mo Money, Mo Problems – Scrutinizing FTC Settlements

1,550 views

Published on

This presentation is from Affiliate Summit East 2014 (August 10-12, 2014 New York City).
Session Description: Ever wonder why the FTC seems to always “win?” This session will explore common pitfalls that subject marketers to FTC scrutiny and how marketers can mitigate their liability before a case is filed.

Published in: Marketing
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,550
On SlideShare
0
From Embeds
0
Number of Embeds
11
Actions
Shares
0
Downloads
9
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Mo Money, Mo Problems – Scrutinizing FTC Settlements

  1. 1. www.ifrahlaw.com www.ifrahlaw.com MO’ MONEY, MO’ PROBLEMS – SCRUTINIZING FTC SETTLEMENTS Affiliate Summit East 2014 Rachel Hirsch, Esq., Senior Associate P (202) 524-4145 /
  2. 2. www.ifrahlaw.com Meet The FTC – The “Notorious” F.T.C. P (202) 524-4145 / “Independent” Federal Agency 5 Commissioners/ 7-Year Staggering Terms Chairman With Fixed Term, But Serves At Leisure of President No More Than 3 Commissioners From Same Political Party
  3. 3. www.ifrahlaw.com Meet The FTC – Bureau of Consumer Protection The “Notorious” F.T.C. P (202) 524-4145 / Division of Advertising Practices Division of Consumer & Business Education Division of Financial Practices Division of Privacy and Identity Protection Division of Marketing Practices Division of Planning and Information DIVISON OF ENFORCEMENT
  4. 4. www.ifrahlaw.com Meet The FTC – Bureau of Consumer Protection The “Notorious” F.T.C. P (202) 524-4145 /
  5. 5. www.ifrahlaw.com Know The Law – Ain’t Nuthin’ But An FTC Thang P (202) 524-4145 / As the nation’s consumer protection agency, the Federal Trade Commission has a broad mandate to protect consumers from fraud and deception in the marketplace. To fulfill this goal, the FTC takes law enforcement actions, provides consumer and business education, issues reports and policy guidance, leads workshops, and participates in other forums. The FTC’s Mandate
  6. 6. www.ifrahlaw.com Know The Law – Ain’t Nuthin’ But An FTC Thang P (202) 524-4145 / The FTC Enforces Consumer Protection Statutes, Including: Fair Credit Reporting Act Fair Debt Collection Practices Act Federal Trade Commission Act Gramm-Leach-Bliley Act Lanham Trademark Act CAN-SPAM Act Telemarketing And Consumer Fraud And Abuse Act Truth in Lending Act
  7. 7. www.ifrahlaw.com Respect The Law – Avoid FTC Scrutiny “Too Legit To Quit?” Or “Slim Shady?” P (202) 524-4145 / www.ifrahlaw.com / rhirsch@frahlaw.com When It Comes To The FTC Act, The Basic Principles of Advertising Law Apply: 1. Advertising Must Be Truthful And Not Unfair And Deceptive. 2. Claims Substantiation Must Occur Before Ad Is Disseminated. 3. Disclose And Disclose Often. 4. Limitations And Qualifications Must Be Included Where Needed. It’s Not Just What You Say, But What You Don’t Say.
  8. 8. www.ifrahlaw.com Know the Process – What Makes You A Target “Can’t Touch This?” P (202) 524-4145 / Anyone Who Is Engaged In Interstate Commerce Except If: Regulated By Federal Banking Agency, Regulated by FCC, Or Regulated By A State Insurance Regulator
  9. 9. www.ifrahlaw.com Know The Process – What Makes A Good FTC Case “Dollar, Dollar Bill Y’All” P (202) 524-4145 /
  10. 10. www.ifrahlaw.com Know The Process – Top FTC Enforcement Priorities “It’s Hammer Time!” P (202) 524-4145 / Protecting Consumer Privacy Protecting Economically- Vulnerable Consumers Trending in Technology Challenging Deceptive Advertising and Marketing Monitoring Environmental Claims Monitoring Marketing to Children
  11. 11. www.ifrahlaw.com Know The Process – FTC Enforcement Trends “It’s Hammer Time!” P (202) 524-4145 / 2010 2011 2012 2013 Identity Theft Identity Theft Identity Theft Identity Theft Debt Collection Debt Collection Debt Collection Debt Collection Internet Services Prizes, Sweepstakes and Lottery Bankers and Lenders Bankers and Lenders Prizes, Sweepstakes and Lotteries Shop-at-Home and Catalog Sales Shop-at-Home and Catalog Sales Imposter Scams Shop-at-Home and Catalog Sales Bankers and Lenders Prizes, Sweepstakes and Lotteries Telephone and Mobile Services Imposter Scams Internet Services Imposter Scams Prizes, Sweepstakes and Lotteries Internet Auctions Auto-Related Internet Services Auto-Related Foreign Money/Counterfeit Check Scams Imposter Scams Auto-Related Shop-at-Home and Catalog Sales Telephone and Mobile Services Telephone and Mobile Services Telephone and Mobile Services Television and Electronic Media Credit Cards Advance-Fee Loans and Credit Protection/Repair Credit Card Advance Payment for Credit Card Services 1,339,265 1.8 million# Of Complaints: > 2 million > 2 million
  12. 12. www.ifrahlaw.com Know The Process – How An FTC Case Develops “Don’t Hate the Player, Hate the Game” P (202) 524-4145 / State Attorney Generals “Surf” Days Private Litigants Your Competitors Triggers For An Investigation
  13. 13. www.ifrahlaw.com Know The Process – How An FTC Case Develops “Don’t Hate the Player, Hate the Game” P (202) 524-4145 / Targets For Investigation Industry-Wide Sweeps Specific Practices Low-Hanging Fruit
  14. 14. www.ifrahlaw.com Know The Process – How An FTC Case Develops “Don’t Hate the Player, Hate the Game” P (202) 524-4145 / INITIATION OF PRIVATE INVESTIGATION Informal – e.g., Access Letter Formal – e.g., Civil Investigation Demand (CID) or Subpoena Or Seek Immediate Relief By: 1. Filing A Complaint For Permanent Injunction. 2. Filing A Motion For a TRO. 3. Requesting An Asset Freeze. 4. Requesting Appointment of Temporary Receiver. 5. Seeking Other Equitable Relief. Best Result? FTC Issues “Closing Letter” After Investigation.
  15. 15. www.ifrahlaw.com Know The Process – How An FTC Case Develops “Don’t Hate the Player, Hate the Game” P (202) 524-4145 / RESPONDING TO CID Read Thoroughly Preserve Immediately Communicate Thoughtfully Negotiate Carefully Produce Cautiously Respond Substantively Preserve Confidentiality Choose Wisely Move Quickly Wait Patiently
  16. 16. www.ifrahlaw.com Know The Process – How An FTC Case Develops “Don’t Hate the Player, Hate the Game” P (202) 524-4145 / Settling By Consent Order May Occur At Any Point Pre-Litigation, Even After Draft Complaint Requires Authority From Bureau Contains Boilerplate Provisions (e.g., Periodic Reporting Requirements) Provides For Civil Penalties, Where Applicable, Disgorgement, Consumer Redress It Turns A Private Investigation Into A Public Headline
  17. 17. www.ifrahlaw.com Know The Process – How An FTC Case Develops “Don’t Hate the Player, Hate the Game” P (202) 524-4145 / Entering Into Litigation It Turns A Private Investigation Into A Public Proceeding FTC Administrative Action (Judge, Jury, and Executioner?) Federal Court Litigation (Bias Toward Government?)
  18. 18. www.ifrahlaw.com Understand The Results – FTC Settlements “Ain’t Nuthin’ But A Gold Digger” P (202) 524-4145 / Health And Beauty Case Name Court Filed Nature of Complaint Enforcement Trend Resolution (Trial v. Settlement) Judgment FTC v. TriVita, Inc., et al. (2014) Federal Court: District of Arizona Deceptive Advertising; False Product Claims: “Relieves Pain! Reduces Swelling! Improves Breathing! Efforts to Stop Advertising of Over-Hyped Health Claims Settlement (2014) $3.5M for consumer refunds plus injunction stipulation In the Matter of L'Oreal USA, Inc. (2014 – with violations dating back to 2009) No Jurisdiction: Administrative Case Deceptive Advertising; False Product Claims: “Youth Code boosts gene’s activity and stimulates production of youth proteins” Cosmetic Companies Crossing the Line with unproven Claims Settlement pre-filing of Federal Charges (Proposed Consent Order – June 2014) Consent Order prohibiting similar claims for product and other L’Oreal products FTC v. Beony International LLC, at al. (2011) Federal Court: N.D. Illinois Deceptive Advertising; Fake News Websites: “News 6 News Alerts: Acai Berry Diet Exposed.” Sweep Against Online Affiliate Marketers Settlement (2013) $13M Suspended to only $1.6M within 5 days; plus sale of 2008 Porsche
  19. 19. www.ifrahlaw.com Understand The Results – FTC Settlements “Ain’t Nuthin’ But A Gold Digger” P (202) 524-4145 / Financial Services/Debt Management Case Name Court Filed Nature of Complaint Enforcement Trend Resolution (Trial v. Settlement) Judgment FTC v. Forensic Case Management Services (2011) Federal Court: Central District of California Illegal Debt Collection Practices: Berated Customers with Obscene/Abusive Language and Threats of Physical Harm Curb Illegal Debt Collection Practices Settlement (2013) $35M combined; reduced to $1,027,000 for inability to pay FTC v. U.S. Mortgage Funding, Inc., et al. (2011) Federal Court: Southern District of Florida False Advertising of Claims for Mortgage Debt Relief; Collection of Payment prior to Service Rendered Scams That Target Homeowners who are behind on mortgage payments Settlements Imposing Judgments (2012) $18.7M suspended to $998,000; plus 1996 Rolex Submariner 2-tone steel & gold, 2007 Cadillac DTC; 1971 53’ Hatteras Yacht FTC v. Asset & Capital Management Group et al. (2013) Federal Court: Central District of California Extorted Payments from Customers under False Threats Stop Debt Collectors who Intimidate and Scam Consumers Settlements Imposing Judgments (2014) $90.5M which include frozen corporate assets; land, vehicles etc.; $4M went to victim compensation
  20. 20. www.ifrahlaw.com Understand The Results – FTC Settlements “Ain’t Nuthin’ But A Gold Digger” P (202) 524-4145 / Telemarketing Case Name Court Filed Nature of Complaint Enforcement Trend Resolution (Trial v. Settlement) Judgment FTC v. Castle Rock Capital Management, Inc. (2011) Federal Court: Central District of California Allegedly distributed illegal robocalls for credit card interest rate reduction programs, extended automobile warranties, & home security systems Stop Illegal Rococalls Settlement (2013) $1.1M suspended due to inability to pay; Ban from industry FTC v. Phillip A. Flora (2011) Federal Court: Central District of California Serial text spammer for deceptive mortgage relief services and free gift cards Crack Down on Affiliate Marketers who sent spam text messages for deceptive websites falsely promising “free” gift cards Settlement and Contempt Judgment (2014) $59,000- suspended upon payment of $32,000; Compliance Monitoring- then in May fined $148,309 and Industry Ban FTC v. The Text Club Inc. et al. (2012) Federal Court: Southern District of New York Called Consumers misrepresenting companies they had purchased from in the past to pitch business development services Crackdown on scams that falsely promise jobs and opportunities to “be your own boss.” Settlement (2014) $15M; also $115M suspended to $2.6M & $114M to $13M
  21. 21. www.ifrahlaw.com Prep Your Team– When The FTC Comes Knocking “Mama Said Knock You Out!” P (202) 524-4145 / Educate Employees Designate A Corporate Representative Identify Purpose of Visit Contact Counsel Involve Counsel Post-Visit Don’t Panic!
  22. 22. www.ifrahlaw.comwww.ifrahlaw.com 1717 Pennsylvania Avenue Washington, D.C. 20006 www.ifrahlaw.com P (202) 524-4145 / Email: rhirsch@ifrahlaw.com Twitter: TheRealMsHirsch Blog: www.ftcbeat.com You May Have 99 Problems, But The FTC Ain’t One Of Them!

×