Credit Card Processing Company approval of your company’s website does not mean that the website is compliant with consumer protection law

Posted by Clyde Hutchins | Jul 21, 2016 | 0 Comments

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. Consumer protection law requires that important disclosures on the website be “clear and conspicuous.” Many online merchants fail to meet this standard. The credit card processing company may review the company website to see if there actually is a disclosure, and review the disclosure to see if provides the material terms and conditions of the transaction. However, that is not the same as reviewing the website to see if the disclosures and “clear and conspicuous.”

According to the Federal Trade Commission, a failure to provide “clear and conspicuous” disclosure of the material terms may be unfair or deceptive under consumer protection law. See .com Disclosure: How to Make Effective Disclosures in Digital Advertising. See also, Federal Trade Commission, et al v. One Technologies, LP, et al, Case No. 3:14-CV-05066, N.D. Cal. Likewise, the State of Wyoming has had a handful of cases in recent years where voluntary settlements were reached with companies that allegedly violated the consumer protection act by failing to provide clear and conspicuous disclosures on their websites.

Q.  How does one ensure that a company's website disclosures are “clear and conspicuous?”

The website disclosures should be reviewed to see if they adequately convey the terms and conditions to the consumer. This is a gray area as there are no hard and fast rules. Everything is reviewed through the eye of the consumer. The basic question is whether the consumer actually perceives and understands the disclosure in the context of the website. Often times, disclosures are made in small print at the bottom of the page or they are drowned out by advertisements and flashy images. That makes the disclosures fail to meet the “clear and conspicuous” bar. A basic guide to start learning how to properly review disclosures is the FTC's .com Disclosure: How to Make Effective Disclosures in Digital Advertising.

It is important to ensure that the website disclosures are "clear and conspicuous." For instance, in the FTC v. One Technologies case mentioned above, the companies had to make $22 million in refunds to the consumers. Under state law, a company failing to provide "clear and conspicuous" disclosure could be subject to various penalties as described more fully here.

If you would like assistance reviewing your company's website for adequate disclosures or need any related help to your company's compliance with consumer protection laws, please feel free to contact Harmony Law.

About the Author

Clyde Hutchins

Clyde Hutchins is the founder of Harmony Law. Prior to opening Harmony Law, Mr. Hutchins worked in the Wyoming Attorney General's Office for several years where he developed a strong consumer protection enforcement unit. In that position he led over 120 investigations and enforcement actions under the Consumer Protection Act. He worked on numerous joint cases with the Federal Trade Commission and other states, including Colorado, on consumer protection matters. Mr. Hutchins is also a contributing author to Consumer Protection Law Developments, Second Edition. Previous to his work in the Attorney General's Office, Mr. Hutchins was in private practice in Anchorage, Alaska where he was the chief litigator for a firm. Mr. Hutchins represented municipalities on various matters. Mr. Hutchins provided counsel to businesses and investment advisors regarding compliance with securities laws. He was also a bond lawyer and worked on municipal financing matters. Prior to that, Mr. Hutchins practiced civil litigation with a law firm in Cheyenne, Wyoming. Mr. Hutchins devotes his spare time to his family, traveling and enjoying the great outdoors.


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Harmony Law is one of the few law firms in Colorado and Wyoming that focuses on consumer law. Mr. Hutchins is a member of the National Association of Consumer Advocates and state chair for Wyoming. If you have a consumer law issue, please feel free to call 970-488-1857 and speak with Mr. Hutchins.

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