Issue 31 - August 2015
tl;dr How to Respond to State AG Complaints to Avoid Dual-Enforcement Collaboration Between the FTC and State AGs
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.
Rachel Hirsch is a Senior Associate at Ifrah PLLC, a law firm in Washington, D.C.
Published on Jul 15, 2015
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