
My Meeting with the FTC
Before I get started, please don’t shoot the messenger. I am just saying what was said, not saying it’s right or wrong. Let me also say, that I was a very small fish in this meeting, so I didn’t have a chance to really get involved in the discussions much like other FTC meetings I have been at (as a consultant).
While I was asked not to disclose the parties involved, I will say that this meeting was done via live teleconferencing with lots of different BIG players represented from a wide range of industries. I was there helping represent a major hosting / data center provider. Not HG by the way.
This was my frist FTC meeting that didn’t involve a specific action by the FTC against a particular company. This meeting was much more like a two way discussion than most I have been involved with. It certainly had a parent (FTC) to teenager feel to it though.
First, these new regulations are targeting lots of people, not just IMer’s. I know some of the major job finding sites were represented, and they got a stern warning about the scammy “work from home” listings. These are the envelope stuffing / medical billing type of “jobs”.
One possible way to help these sites (and likely others) “police themselves” was something I mentioned to Brian (kindsvater) before my meeting that I had an educated guess based on a couple conversations the FTC might be considering. About 2 hours into the meeting this idea was bought up by an FTC rep. They mentioned setting up a system somewhat similar to the current DMCA laws and notification systems.
There is nothing really even in the works on this as far as I know, but they are considering it. Given that, I think it makes sense that we discuss what implication that might have on the IM industry. This would likely be something to the affect of simply notifying/involving people like merchants accounts and hosting providers of possible violations by there users.
Once notified, these bigger players would kinda fall into the realm of actively enabling violations if they failed to act. Thus increasing their liability. Basically the FTC is looking at involving more people who have more to lose in helping to “police” the internet.
I don’t know what all payment process providers were there, but there was mention of the fact the FTC had begun to get much more tough on the “enablers” of these scams. They are looking for an easy way to clean things up without having to go after every small time crook one by one. The FTC knows that if the people they are targeting can't take payments, their number will greatly diminish.
One of the FTC reps. did mention 2 very popular payment processors among warriors. For liability reasons, I will not say the names, but most of you can guess who these are. They indicated these are people they have identified as” enablers” and they are going to continue to “lean” on them to help clean things up.
The FTC is basically looking for places the scams are concentrated, and then they target those places as a whole rather than each person individually. A surprisingly smart move for a government agency.
I will tell you that the tone of the meeting was very much against any “business opportunity” or training that made “income claims” as a way to help sell their stuff. That’s not to say that all income claims are illegal, but it is to say that the tone of the FTC in this meeting was that they wanted income claims to go away. We all know they won’t, but the FTC is not for them. I will also say that the tone of the “crowd” at the meeting was mostly against these income claims as well.
I am sure good lawyers (Brian) will be able to help some skirt the fringes of the law on these matters, but my guess is that the “enablers” are going to be the biggest threat to those who chose to operate on the fringes going forward.
How tough the payment processors and such get on creating and enforcing new rules will just depend on how much pressure the FTC puts on them. I mean they make money with more clients, but not if those clients expose them to risks of action by the FTC against their entire business.
Sorry for the long post, but this stuff is important.
Vic Alexander
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