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An Overview of The Federal Trade Commissions’ Action on Companies
All businesses are protected by the law. The work of protecting the consumer rights is done by government body called the Federal trade commission. The main function of this commission is to ensure that the claims made on the product’s adverts and the and the stickers on the products are correct and true. When a company runs a false advert, or makes a false claim on the products they are selling, the FTC can therefore sue that particular company on behalf of the consumers. I present a few cases where FTC has taken actions against some companies.
Pomegranate juice was a product of Pom company. For a long period, the company had run an advert on the medicinal capability of the juice. The company had claimed that the juice would reduce the rate of growth of cancer as well as solve the erectile problems among men. After a serious research was carried out, it was clear that the allegations were not true and the FTC had invested more than twenty-five million to prove the accuracy of those claims.
Late after the investigations, POM company’s marketing licence for Pomegranate juice was cancelled. The company also was denied permissions to run any other form of advert for other products it was producing. The company was also selling other thirty-seven products and after the investigation, only nineteen were found to be legitimate. The rest of the products were being sold based on false adverts, which had made them popular in the market.
The penalty, which the FTC fines the companies that abuse the consumer rights goes up to one thousand and six hundred dollars. The other company that has found itself on the wrong side of the law is Ohio Car Dealer Company. The company had abused the consumer rights by making false advertisements. On their advert, the company had stated that they were selling their cars on discount. When customers went to buy their cars, they discovered that the discount was only meant for the expensive models only. This advert was seen as misleading the potential customers. Their advert was missing an important part. The part of clarifying which cars were on discount was omitted to mislead the customers.
The Ohio Car Dealer Company was warned against making a similar deceptive advert in future. The car dealer company was blocked from advertising its car prices and discounts and if there was need to do so, then the company advert was to be accompanied by a clear disclosure. Since then, the company has no right to mention the number of cars that are available and at what price, in their adverts. This is not the only car dealer company to have misrepresented the facts about their car selling price and the percentage discount they are giving out to customers.
The other company that had violated the consumer rights is the LifeLock company. LifeLock company offers services related to protection of identity theft. On their agreement with their clients, they had promised to protect their clients against all sorts identity theft. The agreement also included that a customer would pay ten dollars to cover him or her from identity theft. It was later discovered that their promise to the clients was false. The experts discovered that there was no way one could completely prevent identity theft. The measures LifeLock was putting in place could only work for a few individual but not to all. Most of the people private information about their health and employment was still leaking out. The company system was vulnerable to hacking and it posed a serious danger to clients’ privacy since most of the people had provided the company with their private information.
The FTC asked the company to stop giving people false hope and misleading information of privacy theft prevention. They were forced to rewrite their agreement with the clients about the means and the effectiveness of their identity theft protection services. The act of making one’s business known is called advertisement. It is the whole act of making your product popular in the market to attract customers. When advertising for a small company, Derrick should consider the following. A advert should be truthful, fair and non-deceptive with clear evidence to support it. He should understand that the information presented to the customer should be clear, truthful upfront and understandable.
When making an online advertisement, Derrick should clearly know that he is not allowed to use an automated or recorded voice system. He should clearly state the product identity name and seller, clearly state the total cost of goods sold within a particular period of time and explain to the users whether the goods sold can be reaccepted.
The marketing plan for Cruz would be considered illegal. The act of promising customers who give the product a high rating of five stars a reverse for their money can be described as bribing the customers for the purpose of popularizing the product. It should be the clients who give the feedback and not the opposite. After using the product, the customer should willingly give it a rating and give the feedback. There are only two return methods that David can employ to perform a better performance process. When the student fails to achieve an A, the money is refunded or the money is refunded when a student performs.
The rule of disclosure indicates that there should be a disclosure by a company about all the information concerning credit sale. Buck, in his new deal should follow this rule. The rules involved should also be given to the customers to read and understand the penalties. The whole information about the monthly payments and the amount paid if defaulted for the purchase of should be disclosed to the customers. The use of credit service in acquiring whether any person is credit worth and to what limit he should be given credit can be employed to realize good returns. It is also advisable for one to check whether the customer has cleared the pending loans and his credit records.
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