Page 31

Issue 31 - August 2015

tl;dr How to Respond to State AG Complaints to Avoid Dual-Enforcement Collaboration Between the FTC and State AGs

Lessons From

Recent FTC/State AG Collaborations By Rachel Hirsch Rachel Hirsch 2). Re-Evaluate. If your company is receiving multiple consum-


er complaints, especially from the same State AG office, it may be e have all seen the headlines that start with the same omi-

time to examine and re-evaluate your customer policies. Typically,

nous language: “FTC Takes Action Against…,” or “FTC Sues to

your terms and conditions and refund policies will likely need to be

Stop…,” or even the dreaded: “At FTC’s Request, Court Shuts

revamped to ensure that material terms are disclosed clearly and

Down….” These headlines generally signal new enforcement measures

conspicuously and are written in a customer-friendly format.

that the FTC has deemed a priority for that fiscal year, such as shutting down illegal robocallers or stopping supplement makers from deceptive advertising and illegally debiting consumers’ accounts.

3). Train. Most State AG complaints arise from customers dissatisfied with their ability to cancel future shipments of a product or to obtain refunds of past product purchases. These types of problems

Lately, however, the FTC has been sharing the spotlight with other

can be the result of unqualified customer services representatives.

agencies, which pair up with the FTC to flex their respective enforcement

Make sure that all customer service representatives are trained to

muscle. Notably, in recent months, there have been quite a few press

respond to these requests efficiently and effectively.

releases regarding collaborations between the FTC and State AGs offices.

4). Monitor. Sometimes consumer complaints do not emanate The most newsworthy pairing between the FTC and State AGs offices

from your business practices, but rather, the business practices of

was announced in May when the FTC and all 50 states and D.C. charged

your partners. Make sure to monitor your partners to ensure compli-

four cancer charities with bilking over $187 million from consumers.

ance with all applicable laws through periodic auditing and iron-clad agreements.

In the context of FTC/State AG collaborations, the consumer complaints resulting in enforcement actions usually emanate from the State

5). Maintain. To the extent you respond to a customer complaint,

AGs offices, which are the first responders to any illegal or deceptive

make sure you maintain thorough records of your responses. And,

marketing practices. So what lessons should affiliate marketers learn

if your company has received any positive customer feedback, keep

from recent dual-enforcement cases?

track of those records as well to demonstrate good business practices if you are ever the subject of any investigation.

1). Respond. The first course of action, when confronted with a State AG complaint, is to respond, and to respond thoughtfully. Make sure you

Remember, there is only one FTC, but there are 50 State AG offices

investigate the claims being presented, and your formal written response

(plus, the District of Columbia). Keeping their offices happy can be

reflects the findings of your investigation and your overall commitment to

key to avoiding future collaborations that will put your company in the

customer care. In most cases, a full customer refund will do the trick.

headlines. [FF]

Rachel Hirsch is a Senior Associate at Ifrah PLLC, a law firm in Washington, D.C.


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