FTC Clamps Down on Nationwide Deceptive Marketing Campaign


The Federal Trade Commission (“FTC”) recently filed suit against several related companies in connection with a nationwide campaign of deceptive marketing and billing practices.

What is the nature of the deceptive marketing allegations?

The accusations detail an operation in which several interrelated companies violated both the FTC Act and Telemarketing Sales Rule through an elaborate operation that specifically targeted the elderly and others who live on fixed incomes, including veterans.  The FTC has alleged that the companies cold-called consumers, oftentimes placing calls to numbers on the National Do Not Call Registry, to solicit fake investments in e-commerce websites with assurances that the investments would be risk free or otherwise come with a 100% money back guarantee.   The companies received payments from consumers in amounts of up to $20,000 for the purpose of setting up phony investment accounts that the companies assured consumers would earn money to be paid out on a quarterly basis.   At the end of the initial 90-day period, the companies are alleged to have ceased all contact with the consumers to whom refunds were promised, typically accomplished by changing their postal addresses.

Best Practices to Avoid a Deceptive Marketing Lawsuit

We continue to report on the aggressive enforcement of deceptive marketing laws on both a federal and state level.  There is a steady stream of FTC and state attorney general-related actions, judgments and settlements of which we consistently blog.  Accordingly, it is critical for marketers to work closely with experienced counsel to ensure that all marketing campaigns comply with applicable federal and state advertising laws, as well as general industry standards.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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