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FTC Compliance Guide - What It's Like To Get Sued By The FTC - Internet Law Questions Answered
Chip Cooper
Опубликовано: 10 янв. 2014 г.
Chip Cooper, Internet Attorney. Now it's not very often, but every now and then I'm asked the question: what is it like to be sued by the FTC? I know its really bad, really seriously bad, but what is it like to be sued by the FTC.
Well, first of all, you need to understand what gives the Federal Trade Commission jurisdiction or standing to bring a claim against you in the first place. And the key is this - you must be engaged in unfair or deceptive marketing practices. And this is the essence of it - that target consumers, not businesses, but consumers who are located in the United States. That's all the FTC needs in order to bring a claim against you, and it doesn't matter where you're located. For example, you can be in Europe or on the planet Mars even. As long as you are engage in unfair or deceptive practices targeting US consumers, they have jurisdiction over you. And a prime example is the Jesse Willms case back in 2012 that the FTC brought against an online marketer named Jesse Willms. Now, Willms resided in Canada, his businesses was located in Canada, even his servers were located in Canada. However the FTC (it didn't matter) went straight to Jesse Williams - went to his personal assets - and in the settlement got to his house, his car, his pool table and even his wife's fur coat.
Now, its important to understand that asset protection strategies will not be effective against the Federal Trade Commission. For example, if you operate your online business in an entity such as a corporation or an LLC, and then maybe operate that entity inside of another entity, none of that will be effective because the FTC can pierce these entities and reach your personal or business assets like a hot knife through butter, so to speak.
Also, it's important to understand that as part of their remedies, they can bring massive fines, they can issue injunctions against you. But here's one that really, really scares the heck out of a lot of people. They can even freeze your bank accounts and your PayPal account.
So, imagine for a second how you feel if your banker called you one day and said I've had to freeze your bank accounts because of an order by the Federal Trade Commission. How would you pay your bills? How would you pay your mortgage? How would you break the news to your spouse? I can't imagine how you would feel at that moment knowing that all of your financial assets had been frozen by the Federal Trade Commission.
All right, so getting to the ultimate question of what does it feel like to get sued by the FTC, the best description I've ever seen is a blog post by Internet marketer Frank Kern -- K-E-R-N. Back in 2003, Frank was sued by the Federal Trade Commission, and he has this blog post that explains exactly what it was like when he was originally served. He was in his front yard by the way talking on his cell phone when the process server arrived. And said are you Frank Kern? He says yes, he says greetings from the Federal Trade Commission, and handed the complaint and the service of process documents, which Frank said were about 7 pounds of paper. He describes in great detail how he felt at that moment, how he decided to fight the Federal Trade Commission, and after spending approximately $100,000, decided that it was futile to do battle with the US government who has virtually unlimited resources and funds. So he ultimately settled the case. But in that blog post -- and you can read it by Googling "Frank Kern FTC" or "Frank Kern -K-E-R-N- what it's like to be sued by the FTC".
I recommend that you read this to get a real feel for a marketers point to view, not from an attorney's point of view, exactly what it's like.
Now, you also need to know that on the digicontracts.com website, we have a resource -- FTC Auditor Pro - that would help you audit your websites for vulnerabilities to FTC claims. I encourage you to check out that the FTC Auditor on our website. This is the end of the video, thanks for watching.
Chip Cooper, Internet Attorney
Jones & Haley, P.C.
Chip Cooper l Jones & Haley, P.C.
South Terraces, Suite 170
115 Perimeter Center Place
Atlanta, GA 30346-1238
770-664-8555
Welcome 00.01
Question - What Is It Like To Get Sued By The FTC 00:22
FTC Jurisdiction 00.37
Jesse Wilms Case for FTC Compliance 01:18
Asset Protection Ineffective For Protection Against FTC Claims 01:47
FTC Remedies For Non-Compliance 02:17
What Does It Feel Like To Get Sued By The FTC 02:58
More Information Regarding FTC Auditor Pro Service 04:20
