Blog Entry September 2012
The charges outlined in the FTC’s lawsuits against a software business and seven rent-to-own companies are surprising — and OK, some might say a little creepy. Software on rented computers gave the companies the ability to hit the kill switch if people were behind on their payments. But according to the complaints, it also let them collect sensitive personal information, grab screen shots, and take webcam photos of people in
Paranoid delusion from 80s R&B artist Rockwell? Not necessarily, if he had used a computer from a rent-to-own store. Because according to lawsuits filed by the FTC, many stores — including franchisees of Aaron’s, ColorTyme, and Premier Rental Purchase — spied on their customers through secret software that logged key strokes, captured screen shots, and in some cases, remotely activated the computer’s webcam to take pictures of people in their homes. Huh? Yeah, really.
It can take a lot of shoe leather to investigate housing options for older relatives. So entrepreneurs have stepped in to help make those transitions easier. But according to the FTC, two unrelated businesses that offered free online placement services for people looking for long-term care facilities didn’t live up to their claims that they researched each location thoroughly. The settlements offer compliance insights for other companies, too.
No one is going to amend the nursery rhyme, but if you market products aimed at fighting bed bugs or head lice and are itching to keep your promotions in line with the law, two FTC lawsuits merit your attention. Even if bugs aren’t your bag, the cases are a reminder of the need to back up your claims with solid science.
If you use consumer testimonials in your ads or have clients who do, check out the FTC’s settlement with Jason Pharmaceuticals, a subsidiary of the diet company, Medifast, Inc. But to really explore what the case is about, we’ll need to take a trip back to 1992. (Sorry -- we should have asked our UK consumer protection counterparts to let us borrow the TARDIS for this.)
There are lots of good reasons for infomercial marketers and other retailers to abide by truth-in-advertising principles. But for people who insist on a dollars-and-cents rationale, the Court-ordered $478 million price tag for violations related to national ads for money-making systems makes legal compliance look like a bargain.
Are you in the mobile app business? If so, you’re probably considering some important questions, like what to tell users about your app, what information to collect from users, and what to do with any information you collect. Whether you work for a tech giant or are striking out on your own with that gotta-have-it app, the same truth-in-advertising standards and basic privacy principles apply.