FTC Publishes Annual Report

The FTC published its annual report today.  Looks like they’ve had a very busy year, litigating on behalf of consumers.
Essentially, they focused on three primary areas in 2010:
  1. Promoting competition to curb costs, particularly in healthcare
  2. Enforcing conduct in several industries, including technology, data, and social media (including privacy matters)
  3. Conducting outreach to international companies and communities.
Relatively new at the FTC is the Consumer Sentinel Network; a place where consumers can complain about issues they experience.
From their report..

“The Consumer Sentinel Network serves as the FTC’s primary source for determining where the FTC is most needed. Consumer Sentinel collects consumer complaint information and makes it available through a secure, online database to more than 2,000 federal, state, and local law enforcement organizations in the United States, Canada, and Australia. It currently maintains more than 14.4 million complaints collected during the past five years. The database enables the FTC and its law enforcement partners to spot trends quickly, target the most serious illegal practice, reported by consumers, and coordinate law enforcement efforts with its counterparts.”

TOP CONSUMER COMPLAINTS FROM 2010

  • Identity Theft 250,854
  • Debt Collection 144,159
  • Internet Services 65,565
  • Prizes, Sweepstakes and Lotteries 64,085
  • Shop-at-Home and Catalog Sales 60,205
  • Impostor Scams 60,158
  • Internet Auctions 56,107
  • Foreign Money Offers and Counterfeit Check Scams 43,866
  • Telephone and Mobile Services 37,388
  • Credit Cards 33,258
  • Advance-Fee Loans and Credit Protection/Repair 31,726
  • Banks and Lenders 29,967
  • Credit Bureaus, Information Furnishers, and Report Users 28,724
  • Mortgage Assistance Relief and Debt Management 28,584
  • Television and Electronic Media 28,245
  • Business Opportunities, Employment Agencies, and Work-at-Home Plans 24,123
  • Health Care 21,710
  • Computer Equipment and Software 20,833

 

Identity theft and privacy, not surprisingly, hit #1 on their 2010 chart.  Clearly, companies have an obligation to abide by their own privacy policies, implement stringent security and anti-hacking processes, technology, and software, and in some cases, simply create and implement their first privacy policy.

Interestingly, the FTC has a Twitter account, which they actively use.  @FTCgov   In 2010, the FTC sued and won a case against Twitter for misleading users about their personal data privacy protection.  The FTC continues to use Twitter to communicate updates.

In December 2010, they also published a report called Protecting Consumer Privacy in an Era of Rapid Change, which is a proposed framework they call “Privacy by Design” for all companies – new and old – to utilize.  I suggest that every customer service leader read and understand this framework.

Why do I suggest this report to you?  First – because it’s the right thing to do to protect your customers’ privacy (right?) and Second – because in the past 10 months, the FTC has distributed privacy breach redress checks to 1.2 million customers for a total of $40 million.  Yes, $40 MILLION – and it’s not the FTC that is paying this money, is it!?!?

And while we’re on the topic of fines…  Robocalls still seem to be haunting our industry.  The FTC is on the case, and in the past 10 months has won monetary judgements against companies that are knuckleheaded enough to use this technique for a whopping (minimum) $275 million.   The biggest perp?  Countrywide Home Loans.

SIGNIFICANT MONETARY JUDGEMENTS

  • Countrywide Home Loans $108,000,000
  • Inc21.com Corporation $37,970,929
  • American Entertainment Distributors $19,201,403
  • USA Financial $17,300,509
  • Federal Loan Modification $11,526,274
  • Law Center $11,526,274
  • JPM Accelerated Services $9,135,680
  • Innovative Marketing $8,272,962
  • API Trade $7,785,980
  • Loss Mitigation Services $6,262,509
  • Lucas Law Center $6,120,000
I encourage everyone to read this report, as it has a lot more in it than what I’ve summarized here today.  It’s important you stay up-to-date on all legal matters so that you can lead your teams and your company forward properly.
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