In order to make sure our clients stay ahead of the curve and are doing the right things in the eyes of the FTC and other government regulatory agencies, professionals in this area spend a lot of time trying to understand the FTC’s view of the online advertising world. Almost invariably, that view is colored by the complaints the FTC receives. If they receive a large amount of complaints in a particular area, they’re going to pay attention to that trend, and put more resources into investigating there. Ultimately, if you watch the flow of FTC investigations and prosecutions, the trends can usually be traced back to areas rife with complaints. This is government responsiveness at its best, and we should be thankful for the FTC’s approach.
Last week the FTC released its statistics and rankings for the top ten areas of complaint by consumers,
Rank Category Complaints %
1 Identity Theft 258,427 32
2 Shop-at-Home/Catalog 62,811
3 Internet Services 42,266
4 Foreign Money Offers 32,868
5 Prizes/Sweepstakes and Lotteries 32,162
6 Computer Equipment and Software 27,036
7 Internet Auctions 24,376
8 Health Care Claims 16,097
9 Travel, Vacations, and Timeshares 14,903
10 Advance-Fee Loans and Credit Protection/Repair 14,342
11 Investments 13,705
12 Magazines and Buyers Clubs 12,970
13 Business Opportunities and Work-at-Home Plans 11,362
14 Real Estate (Not Timeshares) 9,475
15 Office Supplies and Services 9,211
16 Telephone Services 8,155
17 Employ. Agencies/Job Counsel/Overseas Work 5,932
18 Debt Management/Credit Counseling 3,442
19 Multi-Level Mktg./ Pyramids/Chain Letters 3,092
20 Charitable Solicitations 1,843
According the agency, the list is compiled by collecting consumer fraud complaints from more than 125 other organizations. In order to aid in prevention and prosecution, the complaints are made available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad via Consumer Sentinel, a secure, online database.
The FTC and many other organizations have made the complaint process easier by creating simple, easy to use online interfaces. This has allowed extensive data sharing between organizations, and in 2007, the FTC received almost 140,000 more consumer fraud complaints than in 2006. These additional complaints came from numerous data contributors, primarily the Better Business Bureaus.
Take a few moments to review the list above, and look for areas in which you are running offers. If they are anywhere near the top of the list, be especially careful about your review of these offers. Be proactive, help prevent fraud, and don’t let your company become the target of an official investigation.
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Come back to the iLegal column every week as we get specific about the rules, regulations, laws and trends that affect the online advertising industry. Each week we discuss important legal issues, talk about how to avoid the pitfalls, and cover the breaking legal and regulatory advertising industry news.
Legal Disclaimer: Information conveyed in this column is provided for informational purposes only and does not constitute legal advice. These materials do not necessarily reflect the opinions of Digital Moses, and is not guaranteed to be complete, correct, or up-to-date. The column is provided for "information purposes" only and should not be relied upon as "legal advice." This information is not intended to substitute for obtaining legal advice from an attorney. No person should act or rely on any information in this column without seeking the advice of an attorney.
Mark Meckler is the General Counsel for UniqueLeads.com, Inc., and Unique Lists, Inc. Mark is the Vice Chair of the eCommerce and Technology Committee of the Association of Corporate Counsel, and is a member of the International Association of Privacy Professionals. www.UniqueLeads.com
Copyright 2008 Mark J. Meckler
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