When faced with an investigation by the Attorney General's Office, a common consideration for one owner limited liability companies is whether to dissolve. It may seem that logic would dictate that dissolution would end the investigation, and consequently, any liability or civil penalties that mi...
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Substantiation for Advertising Claims
Substantiation for Advertising Claims Companies making claims about the efficacy of their products must have a reasonable basis for those claims. The claims must be supported prior to the advertising claim. This is called "substantiation." It has long been a requirement for advertising claims, b...
What happens when a consumer files a complaint with the Wyoming Attorney General's Office?
What happens when a consumer files a complaint with the Wyoming Attorney General's Office? Each state has its own system for dealing with consumer complaints made to the Attorney General's Office. A state develops a complaint intake system and handling procedures based upon (1) its population an...
FTC again highlights the importance of "Clear and Conspicuous" disclosure of the material terms
The Federal Trade Commission (FTC) yet again took action against a company for failing to clearly and conspicuously disclose the terms of its product offers online. After receiving thousands of consumer complaints against NutraClick, LLC, the FTC took action against the company to halt its decept...
Defending against a Wyoming Attorney General Subpoena
The Wyoming Attorney General has strong subpoena power. However, there are limits to subpoena power. The consumer protection act provides grounds for resisting a subpoena. The Wyoming Consumer Protection Act provides that a person served with a subpoena may petition "for an order modifying or se...
Comparing the Wyoming and Colorado Consumer Protection Acts - Not exactly the same
The federal government, and each state has a consumer protection law. We normally call those UDAP statutes (i.e. Unfair or Deceptive Acts or Practices) The laws are quite similar and their aim is to protect consumers from unfair or deceptive acts of businesses. However, there are also some distin...
Why so much interest in Wyoming limited liability companies (LLCs)?
Why so much interest in Wyoming LLCs? When I ran the Attorney General's consumer protection unit in Wyoming, I was involved in many, many investigations and enforcement actions against Wyoming limited liability companies (LLCs) under the Consumer Protection Act. I would estimate that 99% of the ...
Is your website or mobile app compliant with the Children’s Online Privacy Protection Act (COPPA)?
The Children's Online Privacy Protection Act (COPPA) was enacted in 1998. The Federal Trade Commission (FTC) enacted and enforces regulations under COPPA. Is your website or mobile app compliant with COPPA? COPPA aims to give parents control over the information that is collected online from young children. COPPA applies to operators of websites, online services and mobile apps that are directed to children under 13 years old that collect, use or disclose personal information about children. It also applies to operators of general websites, online services and mobile apps that have actual knowledge that they are collecting personal information from young children.
FTC hits company hard for engaging in unauthorized recurring charges - Includes violations of the Electronic Fund Transfer Act
The Federal Trade Commission (FTC) recently entered a stipulated order against several defendants in a case that the FTC brought in 2010. The FTC alleged that the defendants "took more than $280 million from consumers via deceptive “trial” memberships for bogus government-grant and money-making p...
What happens when a consumer files a complaint with the Federal Trade Commission?
What happens when you a consumer files a complaint with the Federal Trade Commission? One of the options that consumers think of when they have a consumer complaint against a company is to file a complaint with the Federal Trade Commission (FTC). The FTC is the nation's main consumer protection ...
Subscriptions and Recurring Charges and the Restore Online Shoppers' Confidence Act
As noted earlier, the Electronic Fund Transfer Act, and the corresponding Regulation E apply to subscriptions and recurring charges. But those are not the only federal laws that regulate recurring charges. The Restore Online Shoppers' Confidence Act also applies to situations where consumers purchase products or services online that have recurring charges. The Restore Online Shoppers' Confidence Act generally prohibits charging consumers for products or services sold online through a "negative option feature" unless certain conditions are met. A "negative option feature" is defined as, "an offer or agreement to sell or provide any goods or services, a provision under which the customer's silence or failure to take an affirmative action to reject goods or services or to cancel the agreement is interpreted by the seller as acceptance of the offer." In other words, the consumer is invited to make a purchase with recurring shipments and charges, and the merchant assumes that the consumer wants to keep accepting the shipments until the consumer cancels.
Subscriptions and Recurring Charges and the Electronic Fund Transfer Act
Subscriptions and recurring charges are used by some business engaged in e-commerce. This typically occurs where the business is offering a product or service on a monthly, quarterly or annual basis. Newspapers and magazines are a common product offered through a subscription. Other products include food, supplements, cosmetics, weight loss products, shaving products, clothing, books, soap and many others. Services can be offered this way too. For example, pest control and lawn fertilizer companies offer periodic service calls to your home. Cable, cell phone and satellite television services are offered this way too. A federal law called the Electronic Fund Transfer Act and Regulation E impose certain requirements on subscriptions and recurring charges. In my experience in the Attorney General's Office, I saw many online companies falling short of these requirements.
If it says "all natural" or "100% natural" on the ingredient label, can the product have any synthetic ingredients?
Question: If it says "all natural" or "100% natural" on the ingredient label, can the product have any synthetic ingredients? Answer: According to the FTC, absolutely not! The Federal Trade Commission (FTC) recently approved settlements in several cases where companies advertised that their pro...
Yes, you should retain an attorney to represent you during the interview
The most common question regarding attorney general investigations is whether it is necessary to retain an attorney for the interview. The answer is yes! During the course of an investigation the attorney general's office will usually subpoena one or more witnesses for interviews. The interviews...
The consequences of not responding to a subpoena
I have mentioned before that there are serious consequences to not responding to a subpoena issued by the Attorney General. I want to explain a little more about those consequences. Generally speaking, both Wyoming and Colorado have similar statutory authority for issuing and enforcing civil inve...
What is "clear and conspicuous" disclosure?
Consumers complain to the Federal Trade Commission and attorney general's offices when they did not understand an online offer or feel that they were misled about the terms of the offer. When complaints are made, the agency that receives the complaints will often review the company website to det...
Is it possible to have the other party pay for my attorney fees?
Question: Is it possible to have the other party pay for my attorney's fees? Answer: In some cases, yes. A common exception to the rule that each party pays its own attorney's fees is recovery of fees for the prevailing party in some consumer protection actions. The general rule in Colorado and Wyoming is that each party is responsible for paying its own attorney's fees. If you sue someone, you are expected to pay for your own attorney's fees in the lawsuit. Sometimes attorneys will take a case pro bono (for free) or on a contingency basis such as a personal injury action. The client does not pay in those types of matters. But those are not the only exceptions. Some state and federal statutes provide that a consumer can recover attorney fees from the other side if the consumer is successful. These include federal laws such as the Truth in Lending Act, the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. It also includes the Colorado Consumer Protection Act, and the Wyoming Consumer Protection Act in class action lawsuits and in cases on behalf of elderly and disabled victims of consumer fraud. Harmony Law takes advantage of these opportunities for its clients. Where available in a consumer rights case, Harmony Law will take the case on a contingency basis where the client does not pay for the fees and costs. Fees in such cases are based on a blended hourly and contingent basis.
The Federal Trade Commission's view of Native Advertising
The Federal Trade Commission (FTC) recently issued guidance on ensures that "native advertising" is not deceptive to consumers. "Native advertising" is when an ad resembles the design and style of the media in which it is presented. "Native advertising" is becoming more and more popular in online media. Examples appearing online include some news feeds, where advertising will be inserted part way down the page, but made to look like another news story. Likewise, in some search engines, ads will appear along with the search results. These are both examples of online "native advertising." According to the FTC, in some cases native advertising may be a deceptive act or practice. It depends upon whether the wording and presentation of the ad misleads consumers about the commercial nature of the content. Does the consumer understand that it is an ad and not part of the contextual media?
"Free" Trial Offer?
One of the more common complaints is the "free" trial offer scheme. In this type of case, you see a supplement, weight loss product or beauty product online advertised with a "free" trial offer. You give your credit card or debit card information for the nominal shipping fee (usually $4.00 to $5....
Credit Card Processing Company approval of your company’s website does not mean that the website is compliant with consumer protection law
Question. The company that processes the credit card and debit card purchases through my company website approved the website. That means my company website is compliant with the law, right? Answer. Not necessarily. Many online merchants rely on the company that processes the credit card transactions to determine whether the company website is compliant with the law. That is a very risky practice because the credit card processing company is not necessarily reviewing the website for compliance under consumer protection law.
What type of resolution does the Attorney General's Office seek under Consumer Protection laws?
When the Attorney General's Office takes enforcement action against a company or business owner under consumer protection law, it is usually seeking to obtain one or more of the following: civil penalties, consumer refunds or changes to its business practices. These remedies are all provided for ...
What do you do if served with a civil investigative subpoena or demand from the Attorney General's Office?
Often, a company's first contact with the Attorney General's Office is when served with a subpoena (sometimes called a civil investigative demand.) The subpoena may require that the company provide a witness to be interviewed or it may request copies of documents. The subpoena will have a deadlin...