Ecommerce Law News: FTC Busts Company For “Unfair and Deceptive” Marketing

June 27, 2018

Need a reminder to ditch “unfair and deceptive” marketing tactics? If so, here’s one: The Federal Trade Commission just pounced on a trio of promoters — who, in the interest of simplicity and anonymity, we’ll dub “The Gang”— for posturing as Amazon-affiliated entrepreneurs with an inside track.

Let’s dig into this cautionary tale, courtesy of the marketing and advertising law desk.

The Alleged “Unfair and Deceptive” Marketing Scheme

First things first: How did the operation work?

Well, the Gang conducted “How to Market on Amazon” seminars across the country, sometimes charging as much as $35,000. The crew supposedly regaled audiences with rags-to-riches stories about building $50 million Amazon marketing empires. Moreover, their promotional materials prominently featured Amazon’s logos and marks.

The Gang allegedly also used questionable linguistic tactics, registering shell companies with names suspiciously similar to specific Amazon programs. For example, most e-commerce aficionados associate AWS with Amazon Web Services. The defendants leveraged that link and registered a company called Amazon Wealth Services, which also used the AWS acronym.

Click here for a list of the FTC’s marketing Dos and Don’ts.

Banished After An FTC “Deceptive and Unfair” Marketing Investigation

After an exhaustive FTC investigation into the alleged promotional fraud, the two parties reached a détente in which The Gang promised to no longer market and sell business opportunities and certain coaching services. Nor can the trio exploit, sell, barter, or trade consumer data collected during the scheme.

The Gang must also fork over $10.8 million in assets. And if authorities uncover hidden funds, the amount balloons to $102 million.

Amazon’s Reaction: We Come For Fraudsters

When asked about the incident, Amazon remonstrated:

“Amazon has zero tolerance for fraud and abuse of our systems. We invest heavily to protect the integrity of the Amazon marketplace and take action, including working with consumer protection agencies and law enforcement, to protect our customers and sellers. We will continue to aggressively pursue those who harm our customer and seller experience.”

Contact An Advertising and Marketing Lawyer With E-commerce Experience

Is the Federal Trade Commission beating down your door, lobbing accusations of “unfair and deceptive” marketing? If so, our team is here to help. We’ve guided countless e-commerce entrepreneurs and businesses through FTC conflicts involving everything from consumer fraud to competition law.

Remember: Just because you’ve received a letter doesn’t mean the case is closed. People have prevailed against the FTC. You may be one of them. The first step in figuring that out is getting in touch.

Click here for a list of the FTC’s marketing Dos and Don’ts.

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