Do you have legal protection for your online business? If not, it's time to jump on board!
I got the opportunity to interview Chip Cooper, who is the go-to Internet attorney for all things related to the Federal Trade Commission (FTC).
He is the co-founder of FTC Guardian, which is the Internet's most advanced online compliance and SaaS document generation platform.
If you don't comply with FTC rules, you can get into trouble. I want to make sure that this doesn't happen to you.
Ready to discover what every Internet entrepreneur needs to know in order to keep their business is compliant? Listen to Chip Cooper!
Watch the video below:
(Click here to watch on YouTube)
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Are you ready to get legal protection for your online business? CLICK HERE to discover how FTC Guardian can help you!
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Chip Cooper is an FTC compliance expert.
He developed the FTC Guardian platform in order to help online marketers and entrepreneurs ensure that they are compliant with the ever-changing laws and regulations of the FTC. When you market and sell your products, you have to take into account the legal ramifications of doing so. This is why legal protection for your online business is a must.
I have been personally working with Chip Cooper for the last year now to ensure that my company, Project Life Mastery, is protected. I wanted to pick Chip's brain about the FTC and get the facts so that you know what the FTC policies and best practices are moving forward.
How did you become an Internet attorney?
I've been involved with software companies for years. Once companies started moving from the traditional model of delivering software to selling products and services online, I decided to get involved.
How long have you been working with online business owners?
Beginning in 2009, there was a tsunami of new laws and regulations and very aggressive enforcement of them. People started to listen to me once this happened. In 2014, I got together with Allyn Cutts to form FTC Guardian.
How is the Internet regulated and governed?
You need to understand that the vast majority of products and services marketed online are marketed to consumers. These are people like you and I. There is this underlying assumption by the Federal Trade Commission that the general population of consumers are basically ignorant and easily fooled by unsavoury advertisers.
Because of that concern, the FTC has the preeminent federal regulatory body to protect consumers against scam advertising. With the FTC, there are remedies that do not exist in the normal civil litigation realm. For example, the FTC can appoint a receiver to take over your business.
They can even freeze your bank account and assets.
In fact, it really doesn't matter where the marketer is physically located. As long as they are selling into the United States, they are regulated. It doesn't matter if a company is operating as a Corporate or LLC entity either. The FTC can pierce that entity to go after one's personal assets as well. Hence, there is no trick or silver bullet to avoid FTC regulation. Your only option is to become compliant. The FTC has a lot of power that you don't see in our legal system.
What are the biggest mistakes that you see online marketers make?
One mistake is missing documents that you typically see on a website. The most important one being the privacy policy. The other mistake would be strategies that the advertiser has used without understanding what the rules are.
Let's go back to the privacy policy. This is a very important document. Generally speaking, it's supposed to describe the personal information and other information you collect from people. In particular, why you collect it, how you use it, and how you make it available to others. An important point to take into consideration is that the FTC views the statements and assurances in the privacy policy.
The idea is that the consumer can click on a privacy policy link on a web page if they want to. If they decide that your sharing policies aren't satisfactory, they can decide not to do business with you. The FTC says that these statements and assurances are promises. If you violate those, it's considered to be a deceptive marketing practice.
There is a huge lack of understanding about the fundamentals of advertising.
A lot of people don't view themselves as advertisers. However, if they are making claims about what their products or services will do, they are an advertiser. These types of statements are ad claims.
When you combine expressed and implied claims together, its called the net impression that a consumer reaches. The marketer wants that net impression to say, “I'm in agreement with the call to action.”
However, that claim has to be substantiated by competent and reliable scientific evidence. That's a pretty significant burden. The real question is, “What are the ad claims or do you even know that you're making them?”
If you know what the ad claims are, then you need to know what your substantiation burdens are.
Moreover, what alternatives exist that may not have such a big risk involved in terms of substantiation. It's all about understanding the rules, options, and choices among the various levels of risk. That's what we try to teach our members.
If someone doesn’t have the money to hire a compliance lawyer, what do you suggest they do?
When you're just getting started, the general misconception is that you can fly under the radar. There may be some truth to that, but generally speaking, this isn't the case. In 2014, the FTC started to be less concerned with the big guys and started drilling down on small businesses.
For that reason, you need to protect yourself.
This means you get a lawyer, which can be fairly expensive. Conversely, you find another opportunity to acquire the knowledge, training and documents that you need. That's what FTC Guardian gives you.
If someone doesn’t have the money to hire a compliance lawyer, what do you suggest he/she do?
I highly recommend that someone does business in a corporation or LLC. Generally speaking, it will protect your personal assets from any type of lawsuit, except for the FTC. That is the exception. It's great advice but it's not the silver bullet with respect to the FTC. The corporation is usually the less expensive option.
Are there other agreements or contracts that people should have in place in order to protect themselves from being sued?
The other document that you need to have is some kind of agreement that binds you with your customer. Your customer has various rights and you need to have this contract with them. Also, you need to do this to lock down your right to get paid and how you are supposed to get paid. If you are merely selling something with a shopping cart, that's not binding your customer to the terms and conditions.
It's got to be an enforceable contract.
A lot of people believe that the terms of use that you see linked at the bottom of a page is a binding contract but it's not. It may be clicked on by a visitor, but it probably won't be. There cannot be an enforceable agreement without both sides acknowledging acceptance of it. In the old fashioned non-digital world that action is the signature on a piece of paper. However, in the online world, it's a check box.
Is there anything else that people need to know in terms of being compliant online?
I think one of the biggest things is that there has to be a general understanding of what the FTC is all about and how it works. It starts with understanding an ad claim, what the requirements are, and how testimonials fit into that. Secondly, you need to have a resource that you can go back to so that you can find knowledge on new developments related to the FTC. This is how you will stay current. Once you understad these things, everything else starts making sense.
We tell our members that you can't learn it all in one month.
However, you can get started with the basics and then attend our hangouts. All of a sudden, you are now involved in the rules of the game that you play in. The idea is not to be knowledgeable at my level. Rather, it's about having working knowledge of how everything works.
Any final message that you want to share with people?
Things have changed a lot in the last 5-7 years. In particular, since 2009. This was a big date in regulation history on the Internet. If you are a small business, there appears to be barriers to entry now that didn't exist just a few years ago.
You really need a source to help you stay current and conversant with what is going on. It's happening at such a rapid rate. This is why we believe in our service. Our membership is reasonably priced. Once you're in, you have access to myself and my partner, Allyn Cutts.
Twice per month we do a Q&A about a topic that we choose for discussion. This is a great way to stay up-to-date with what is now a moving target in terms of regulation.
Are you ready to get legal protection?
If you want to ensure that you aren't breaking any FTC laws, I encourage you to check out Chip Cooper's work!
Are you ready to get legal protection for your online business? CLICK HERE to discover how FTC Guardian can help you!