FTC Privacy Rules - What You Need to Know

Small businesses need to know what the Federal Trade Commission (FTC) is recommending in their 72-page report on consumer privacy about how customer personal information should be handled online and offline. Here are five points small businesses need to know about the FTC recommendations as U.S. data-privacy regulations evolve.

The report doesn’t actually establish any rules. It does make recommendations to Congress for developing new consumer-privacy rules and offer best practices for businesses.

Some small businesses don’t need to worry. If you only collect “non-sensitive” consumer data and don’t share it with third parties, your business is exempt from the FTC guidelines. However, if you are collecting Social Security numbers and financial, health, children’s, and geo-location information, then take notice. Furthermore, if you collect any data from more than 5,000 customers each year, or if you share with third parties, following FTC best practices is recommended.

Common sense goes a long way. If you are practicing transparency and simplicity, you are doing well. Be upfront with customers about what information you collect and why. Keep privacy policies simple and easy to understand. Give customers a chance to opt out when applicable.

“Do Not Track” is coming. Web browsers such as Mozilla Firefox already have privacy tools that allow consumers the feature to limit data that is collected about them. The Digital Advertising Alliance has a tool for members, too.

Pay particular attention to mobile data. The FTC report says, “The unique features of the mobile phone which is highly personal, almost always on, and travels with the consumer have facilitated unprecedented levels of data collection.” As a result, expect more guidelines or regulatory requirements.

Be aware of what information is collected, what happens to it, and how the privacy policy is stated whether you are the business or consumer.

FTC Privacy Rules - What You Need to Know

Small businesses need to know what the Federal Trade Commission (FTC) is recommending in their report on consumer privacy about how customer personal information should be handled online and offline. 

Here are five points small businesses need to know about the FTC recommendations as U.S. data-privacy regulations evolve:

The report doesn't actually establish any rules. It does make recommendations to Congress for developing new consumer-privacy rules and offer best practices for businesses.

Some small businesses don’t need to worry. If you only collect “non-sensitive” consumer data and don’t share it with third parties, your business is exempt from the FTC guidelines. However, if you are collecting Social Security numbers and financial, health, children’s, and geo-location information, then take notice. Furthermore, if you collect any data from more than 5,000 customers each year, or if you share with third parties, following FTC best practices is recommended.

Common sense goes a long way. If you are practicing transparency and simplicity, you are doing well. Be upfront with customers about what information you collect and why. Keep privacy policies simple and easy to understand. Give customers a chance to opt out when applicable.

“Do Not Track” is coming. Web browsers such as Mozilla Firefox already have privacy tools that allow consumers the feature to limit data that is collected about them. The Digital Advertising Alliance has a tool for members, too.

Pay particular attention to mobile data. The FTC report says, “The unique features of the mobile phone which is highly personal, almost always on, and travels with the consumer have facilitated unprecedented levels of data collection.” As a result, expect more guidelines or regulatory requirements.

Be aware of what information is collected, what happens to it, and how the privacy policy is stated whether you are the business or consumer.

Satisfaction Guaranteed — What It Really Means

The “pants lawsuit” may have been regarded as one of the most frivolous cases in American history, but it did remind business owners to take care when they advertise.

In 2005, Roy Pearson sued his local dry cleaners over a pair of lost suit pants. The dry cleaners had a sign in the window that said “Satisfaction Guaranteed.”

Mr. Pearson lost the case, and wasn’t awarded the $67 million that he originally sought from the business. The Superior Court of the District of Columbia found that the phrase doesn’t mean that the customer is entitled to anything that his or her heart desires.

However, with a “satisfaction guaranteed” claim, consumers can reasonably expect a full refund if they aren’t satisfied. In the end, the court found that the business offered Mr. Pearson more than the value of his pants.

BBB advises both businesses and consumers to be aware of the meaning of “Satisfaction Guaranteed” claims.

Not only the court, but also the Federal Trade Commission (FTC) guides and the BBB Code of Advertising call for a full refund with a “satisfaction guaranteed” claim. Any material limitations or conditions that apply to the guarantee should be clearly and prominently disclosed.

BBB also advises consumers to read and understand any terms and conditions for any guarantee, including “Satisfaction Guaranteed” claims. Guarantees often have requirements, restrictions, or limitations that consumers would want to know about. It’s easy for businesses to take a few steps to avoid consumer confusion with clear and straightforward advertisements.

Businesses that don’t offer a full refund may use a different claim. Phrases like, “customer service is our highest priority” and “customer service promise” give the impression that a business will work to remedy dissatisfaction. However, these claims don’t give the impression that a full refund will be issued.

Businesses that do intend to give a refund should be sure to disclose any material limitations to the guarantee. Here are a few examples of how limitations can be disclosed:

1. We guarantee your satisfaction. If not completely satisfied with ABC product, return the unused portion within 30 days for a full refund of the purchase price.

2. Satisfaction Guaranteed! Full refund available upon written request within 60 days of purchase.

3. Just return the ABC product in its original package within six months and we will fully refund your money, no questions asked.

Yellow Pages Look-A-Like Scams

As a small business owner, have you received an official looking invoice from what appears to be the Yellow Pages? This scam continues to gain steam despite numerous investigations and enforcement actions taken by the FTC.   

The “walking fingers logo” and the Yellow Pages name have no copyright or trademark protection, making it easy for scammers to make it appear legitimate. 

If you receive an invoice like this, you should request additional information from the solicitor and check with your local Yellow Pages for affiliation. 

If you have been a victim of this type of scam, contact us at bbb.org.

How Fake FTC Emails are Tricking Business Owners

A new phishing scam is making the rounds disguised as a consumer complaint notification from the FTC. If you receive it, just hit "delete."  

How the Scam Works:

You get an email that appears to be from the FTC with the subject line: "Notification of a Consumer Complaint." (Sample email below) The email states that a complaint has been filed against your business, and you need to review and respond to the allegations. 

The email provides a link for you to supposedly click through to the FTC website and download a PDF of the complaint details. The link really goes to a third party website, and the file you download is actually malware that scans your computer for personal and banking information.

Like most scams, this one is not set in stone. Several variations already exist, and scammers will continue to alter the emails as news of the con spreads. Watch out for changes in the subject line and the complaint details. Older reports of the scam involve emails that urge recipients to call a fake FTC help hotline or complete an online complaint form.  

How to Spot a Phishing Email:  

• Don't believe what you see. Scammers can make links look like they lead to legitimate websites (as in the example above) and emails appear to come from a different sender. It's also easy to steal the colors, logos and email header of the FTC or any other established organization.
• Be wary of unexpected emails that contain links or attachments.Do not click on the links or open the files.
• Check a link's true destination by hovering over it and looking in the lower right hand corner of your browser.
• Try Googling the organization or the contents of the email. If the email is a scam, this is likely to reveal an alert or bring you to the organization's real website, where they may have posted further information.

For More Information  
Check out the Federal Trade Commission's official warning about the scam.
 
To find out more about scams, check out BBB Scam Stopper.

Protecting Your Business Against Office Supply Scams

Businesses are being bilked out of millions of dollars through office supply scams.  The typical office scam may include a phony invoice or a phone call from someone pretending to be your regular office supplier.

BBB and the FTC offer 5 rules for protecting your business against a scam like this:

1. Know and insist on your rights. If you receive merchandise you didn't order, you may keep it as a gift according to the FTC.  According to a federal law commonly referred to as the "Unordered Merchandise Law," and principles established in FTC enforcement cases, it is illegal for the seller to send you bills or dunning notices for unordered merchandise and ask you to return it, even if the seller offers to pay the shipping expenses.

2. Don't pay any bills that don’t match your documentation. When the supplies arrive, the receiving employee should check to see that it matches the shipper's bill of lading.

3. Document orders. For each order, an employee should issue to the supplier a written purchase order on a standard multiple-copy form with an authorized signature and a purchase order number.

4. Train your employees. If your employees are not familiar with certain callers, advise them to say something like, "I am not authorized to order anything. You will have to speak to the person in charge of ordering supplies and get a purchase order."

5. Do not pay for or return unordered merchandise.  If you are certain that you didn't order the merchandise the seller has shipped, do not pay for or return the merchandise.

For more information visit http://www.bbb.org/boston/Business-Reviews/view/industry-tips/protecting-your-organization-against-office-supply-scams-122.