Category Archives: Consumer Law

Can You Get Your Customers to Agree Not to Provide Negative Reviews of Your Business?

shhh stock-footage-shhh-girl-puts-fingers-to-lips-shallow-depth-of-fieldSetting aside for a moment whether you should ask your customers to agree not to provide negative reviews of your business as a business practice (that is a discussion all its own), the question before us is whether such an agreement is likely to be enforceable as a legal matter.

Our last post discussed the issue of online defamation by non-customers and what can be done about it. Now we are going to address your ability, as a business owner, to prevent customers from providing negative reviews of your business by getting them to agree not to do so.

Non-disparagement Clauses

This type of clause is called a “non-disparagement clause” and it is fairly common in settlement agreements in connection with litigation and  in agreements relating to the purchase of a business (asset purchase/stock purchase agreements). It goes something like this:

Party A agrees not to make any disparaging statement, either orally or in writing, regarding Party B, the business, products, or services of Party B, or any of Party B’s shareholders, directors, officers, employees or agents, especially its lawyers, who all Parties agree are most excellent.

Okay, so I made that last clause up, but the rest of it is fairly typical of such agreements. Again, these clauses Continue reading Can You Get Your Customers to Agree Not to Provide Negative Reviews of Your Business?

Who Doesn’t Love a Contest?  Step Right Up! Don’t be Shy!

Cards by Steve A Johnson via Flickr Some Rights Reserved
Cards by Steve A Johnson via Flickr Some Rights Reserved

Are you considering running a promotional contest for your business through a social media platform? Excellent! What fun! Who doesn’t love a contest? You’ll just want to be sure the contest doesn’t cause your business more trouble than it’s worth. And, really, it shouldn’t – as long as you play by the rules. Continue reading Who Doesn’t Love a Contest?  Step Right Up! Don’t be Shy!

Hey, Willy Wonka! Be Careful With Those “Golden Ticket” Prize Promotions.

Willy Wonka Golden TicketHave you ever thought about the fact that Willy Wonka’s “Golden Ticket” prize promotion was more likely to land him with a heavy fine (or, possibly, in jail) than it was to land Charlie in the Chocolate Factory? As detailed in this story from imore.com, Steve Jobs learned about the legal barriers to just such a scheme in time to avoid the cost of engaging in it to promote sale of the iMac with his own Wonkatistic fantasy tour of Apple for the millionth iMac purchaser.

Bottom line: Use prize promotions at your own risk. It’s a gamble.

See, in America, EVERYTHING (just about) is regulated, including seemingly innocuous activities like raffles and prize promotions. So, before starting such a promotion, it may be wise to determine which laws apply to you, then review the relevant laws and consider whether your proposal is likely to cost you more in legal fees to defend you in court than it gains you in sales. Better yet, contact an experienced attorney familiar with B2C law who can help you determine which laws to apply to your facts and provide you with actual legal advice (unlike this post, which is purely for informational purposes – see disclaimer below). Continue reading Hey, Willy Wonka! Be Careful With Those “Golden Ticket” Prize Promotions.

Online Privacy, Do Not Track, and the “Post-Cookie” World: New Guidance from the IAB

115562673_03b7fceea6_nEven as website owners and operators struggle with how to comply with recent changes to the law governing Online Privacy Policies, changes to the underlying technology are in the works, bringing about the so-called “Post-Cookie World” and begging the question of how to adapt your online privacy policy to meet this new technology. I won’t pretend to understand the intricacies of cookie or post-cookie technology; my concern is drafting online privacy policies for my clients that adequately address whatever technology is currently in vogue and understanding just enough of it to do so.

In an effort to understand the underlying technology just enough to be dangerous (and glean some drafting principles that may follow from it), I recently came across guiding principles for developing cookie replacement technology published by the Interactive Advertising Bureau (“IAB”) entitled “Privacy and Tracking in a Post-Cookie World.” In developing its guiding principles, the IAB begins by “Imagining a world where HTTP cookies were never invented” and suggests that, in developing alternatives to the cookie for tracking consumers, it is important to bear in mind what the consumer wants.  In my experience dealing with regulators who have no concept of something being outside their regulatory authority (particularly with consumers complaining to them), the IAB is correct that a proactive approach could keep the regulatory wolves at bay: Continue reading Online Privacy, Do Not Track, and the “Post-Cookie” World: New Guidance from the IAB

Shedding Light on the Importance of Having an Accurate Privacy Policy

Brightest Flashlight2Goldenshores Technologies, LLC developed The Brightest Flashlight Free app, which allowed users to use their mobile devices as a flashlight by simultaneously activating all of the device’s
light sources. According to the FTC, this app was downloaded millions (tens of millions, actually) of times.  At the same time it was lighting up the user’s world, The Brightest Flashlight Free app was enlightening third parties to the user’s personal information, including precise geolocation and unique device identifiers. As described by the FTC:

While running, however, the application also transmits, or allows the transmission of, data from the mobile device to various third parties, including advertising networks. The types of data transmitted include, among other things, the device’s precise geolocation along with persistent device identifiers that can be used to track a user’s location over time.

All of which would be fine and dandy if the app had appropriately disclosed to users what it was doing, but the FTC says it didn’t – and filed a complaint against Goldenshores. According to the FTC’s complaint, Goldenshores told users in its privacy policy that personal information collected by the Brightest Flashlight Free app would be used by the company for various internal purposes, but “failed to disclose or failed to adequately disclose” that the app transmitted that personal information to third parties, including advertising networks. Continue reading Shedding Light on the Importance of Having an Accurate Privacy Policy

The Cost of Careless Advertising – FTC’s “Operation Steer Clear”

false advertisingOn Thursday, the Federal Trade Commission (FTC) announced settlements with various automobile dealers in “Operation Steer Clear,” which the FTC touts as a nationwide sweep of false advertising claims against dealers.

What standards did these auto dealers collide with?

The FTC alleged various misrepresentations in its complaints against the dealers (“alleged” because these cases were voluntarily settled, not adjudicated).  These alleged misrepresentations, inaccuracies, and false statements were found in print, Internet, and video advertisements. Wherever you advertise, accuracy and compliance with various consumer protection regulations are advisable.

Many of the alleged violations were for statements that were obviously false, like advertising the vehicle for $5,000 less than the offering price or falsely asserting that consumers had won sweepstakes prizes they could collect at the dealership. Assuming the allegations are true, these merchants had to know their statements were untrue. I’m sure none of my readers commit that type of obvious misrepresentation, so I’ll focus on the advertising violations that are perhaps a bit more subtle.auto dealer

The more subtle (alleged) violations involved requirements found in federal leasing and financing laws – i.e., the Truth in Lending Act and its implementing regulations (Regulation M for consumer leasing and Regulation Z for consumer lending). Under these laws, when certain terms are contained in advertising (so-called “triggering terms”), other terms must necessarily also be included in the ad. Continue reading The Cost of Careless Advertising – FTC’s “Operation Steer Clear”

3 Ways to Make Sure Customers Who Pay Late Don’t Create Even More Headaches for You

imageYou rightly expect your customers to pay their invoices on time. But, understanding human nature, you prepare for late payments by letting them know you will charge a late fee if they don’t pay on time.  You may ultimately end up bringing them to court. To make sure your righteous quest to get paid doesn’t end up getting YOU in hot water, here are three things you can do:

1. Be sure your contract with the customer provides for payment of a late fee. If you have not contracted for it, you may not be able to assess it. The customer has to know that paying late will result in extra fees.

2. Check your state law for limits on the late fee that may be assessed.

3. Be careful not to inadvertently bring the transaction under the requirements of your state’s consumer credit laws. This can happen primarily in three ways: Continue reading 3 Ways to Make Sure Customers Who Pay Late Don’t Create Even More Headaches for You