Blog Entry May 2012

On classic episodes of the Tonight Show, affable sidekick Ed McMahon sought guidance from Johnny Carson's all-knowing Carnac character.  But as demonstrated by a recent FTC law enforcement action — which involved a company's misleading reference to the late Mr. McMahon — you don't need a psychic to know that challenging deceptive debt collection practices remains a top priority.

It's on now:  the FTC's national workshop In Short:  Advertising & Privacy Disclosures in a Digital World.  How can you get involved?

Identity theft hits millions of Americans each year.  What many business executives don’t know is that ID thieves are using a variation on the crime to prey on legitimate companies.

In Short: Advertising and Privacy Disclosures in a Digital World — an FTC workshop to discuss guidance on disclosures in the online and mobile world — is set for May 30, 2012.  This is the latest development in the ongoing conversation about revising the FTC’s 2000 guidance publication, Dot Com Disclosures.

An FTC Administrative Law Judge ruled that POM Wonderful LLC and related parties made misleading claims that POM Wonderful 100% Pomegranate Juice and other products would treat, prevent, or reduce the risk of heart disease, prostate cancer, and erectile dysfunction.  Although the remedy in the case wasn’t everything the FTC staff had asked for, the ALJ concluded that POM had engaged in false and deceptive advertising.

According to the FTC, Skechers made false and deceptive claims about the benefits of Shape-ups and other Skechers brands.  If you’re in the fitness or health business, the $40 million settlement should grab your attention.  But the underlying principles apply to all advertisers.  If you're looking to get a leg up on substantiation, here are some footnotes to take from the case.

It’s usually Skechers promising to help people shape up. But this time, the shoe’s on the other foot.  In a $40 million settlement announced by the FTC — part of a broader agreement that also resolves charges by state AGs — the agency is telling Skechers to shape up its claims for Shape-ups and other Skechers shoes.

Drip pricing: It may sound like something involving faulty plumbing fixtures, but it's the practice of advertising only part of a product’s price up front and then revealing other charges as the shopper goes through the buying process.

On May 21, 2012, the FTC is sponsoring a Conference on the Economics of Drip Pricing.  The panels of econ profs — boasting more degrees than a thermometer — will discuss empirical analyses of drip pricing and the policy implications for consumers and competition.

The terms of FTC law enforcement actions apply just to the company in question and the proposed settlement with social network Myspace for alleged privacy-related glitches is no exception. But how should other businesses respond?

Social network site Myspace promised users it wouldn’t share their personally identifiable information in a way that was inconsistent with the reason people provided the info, without first notifying them and getting their approval. The company also said that information used to customize ads wouldn’t identify people to third parties and that Myspace wouldn’t share browsing activity that wasn’t anonymous.

Have you reviewed your company’s privacy policy lately? The FTC’s proposed settlement with social network Myspace serves as a timely reminder to make sure what you tell people about your privacy practices lines up with what actually happens in the day-to-day operation of your business. While you’re at it, double-check to make sure you’re giving customers the straight story about third-party access to their information.

Here’s a compliance tip that extends beyond the narrow facts of the FTC case at hand: If you run into legal trouble and are able to avoid law enforcement action, make sure it doesn’t happen a second time. That’s what business people from every sector can take from the FTC’s settlement with James Donofrio and Donmaz Ltd., doing business as New York’s Blair-Mazzarella Funeral Home.

The FTC just released the preliminary agenda for the May 30, 2012, workshop to consider the need for new guidance for online advertisers about making disclosures. If that’s a topic of interest to your business (and it’s tough to imagine a company not involved in those discussions), you’ll want to stay up on the latest.

What’s on the schedule for May 30th? After a kick-off presentation on usability research, the workshop will feature four panels:

9:30 – Panel 1: Universal and Cross-Platform Advertising Disclosures

An undercover inspection at a funeral home?  It may sound like the plot summary for a movie pitch, but it's the very real — and very serious — work of people trying to make sure consumers are protected when they're shopping for funeral services.