Clicky’s Compliance Corner – FTC Biz Opp Rule Update
A few months ago we brought to your attention the Federal Trade Commission’s Business Opportunity Rule that became law on March 1st, 2012. The new rule is intended to provide standardized compliance requirements for sellers of “Business Opportunities,” often known as a “biz opp” in the online marketing industry. Although no one could know for sure whether these biz-opps technically fell under the legal definition of the rule outlined by the FTC, Clickbooth proactively initiated a requirement of all advertisers who could even arguably be subject to the definition of this rule to complete the required disclosures in order to remain active on the network.
Did we turn away business and sit out on generating revenue in this vertical? Yep, without a second thought.
Recently, the FTC filed an action in Arizona against North America Marketing and Associates LLC (and numerous other defendants) accusing them of defrauding consumers into buying a business opportunity that promised not only a “turn-key” Internet-based business, but also professional business consulting services at no additional cost. According to the FTC this “consultant” only served to pressure consumers into additional needless marketing services costing up to $20,000 on top of what the consumer had already paid.
These deceptive marketing practices are considered to be in direct violation of the Section 5 of the FTC Act and the Telemarketing Sales Rule. The court froze the Defendants’ assets as well as granted a temporary restraining order against them — effectively shutting down their business.
Clickbooth is at the forefront of compliant business practices. Consumer safety is key to our corporate mission and paramount to our clients’ success. We constantly monitor evolving laws regulations like the Business Opportunity Rule. In this case, as always, our Compliance Team is consistently ahead of other networks ensuring that we protect advertisers, publishers, and consumers.
To read more on the FTC case click here: http://www.ftc.gov/os/caselist/1023247/index.shtm