Clicky Compliance Corner: The Government Frowns on Being Impersonated By Advertisers

With American banks foreclosing on millions of homes across the country, it’s no surprise that a growing market is developing for companies who specialize in consumer debt relief.  There are many great companies out there that are doing right by consumers and helping them through these difficult times.  Unfortunately, at the same time there will always be some that try to take advantage of these already hurt consumers.  As always consumer protection needs to be the top priority of all online marketers and advertisers, but when you are dealing with an already struggling consumer extra special super duper top priority should be taken to protect the consumer.

Misrepresentations or deceptive omissions of material fact constitute deceptive acts or practices prohibited by Section 5(a) of the FTC Act. Case in point is a mass text message marketer who blasted upwards of 200,000 text messages per day to consumers’ cell phones advertising loanmod-gov.net , which claimed to provide “Official Home Loan Modification and Audit Assistance Information.” The FTC claimed that messages like, “Homeowners, we can lower your mortgage payment by doing a Loan Modification. Late on payments OK. No equity OK. May we please give you a call?” misled and deceived consumers into thinking the site was affiliated with a state, federal, or local government.

Obviously, including the phrase “gov” in the domain name (drawing upon consumers’ familiarity with the .gov extension, like for example, www.FTC.gov) was one of many of allegedly misleading things that this marketer did to draw the ire of the FTC. But the text messages were frequently sent to cell phones registered on the National Do Not Call Registry maintained by the FTC, and thus had explicitly indicated that they did not wish to receive unsolicited marketing calls on those handsets. The FTC alleges that when the recipients responded back, even telling the sender to stop, he collected those numbers and sold the data to third parties as debt settlement leads. As you can probably guess, the FTC also levied counts of Unfair Transmission of Text Message Spam, since most of the recipients never opted-in to receiving messages from the marketer.

The lesson to be learned here, whether you’re advertising in print, tv, or the internet, is that you should always keep your marketing materials FTC-compliant. If you take a second to think about it compliance is very simple; when evaluating your marketing materials remember to use the acronym “TAC” which stands for True Accurate and Correct.  If your marketing materials are all TAC then you are at the very least on the right road to compliant. Think about it, in this case if the product was actually affiliated with the government, then it would have been okay to say so, but because it wasn’t the marketing was misleading and clearly not TAC.  There is no acronym that cures stupidity, so don’t even think about violating the Do Not Call Registry, the CAN-Spam Act, or ignoring consumer opt-out requests.

With the economy the way it is, the FTC is coming down hard on marketing practices that prey on debt-riddled consumers by suggesting the government is backing a product. Even something as subtle as using the word “Official” combined with “gov” in your domain name may be enough to be considered misleading by the Federal Trade Commission.

Ultimately, if you do right by consumers you should have little to worry about.

You can read the whole Complaint here . http://www.ftc.gov/os/caselist/1023005/110223phillipcmpt.pdf

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