Editor's Note: For any questions regarding the law, please contact your attorney.
When your business is small, there is a good chance you can fly under the radar of the FTC and other legal entities. No guarantee, but odds are they are looking to fry bigger fish.
However, if your business is successful, you are indeed at risk. That's because the higher your profile becomes, the more likely you are to become the target of an investigation.
And should that happen, you want to have everything in your business exactly the way it should be.
Which is why, regardless of your business' size right now, you need to fall into compliance with these issues as soon as humanly possible.
There are online marketers who have lost EVERYTHING because they failed to do this.
Imagine building a 6 or 7 figure business, only to see it taken away from you.
Worst yet, imagine fines you cannot pay and possible jail time. Yikes.
Here are three key legal issues every online marketer needs to be aware of before your online success spells your demise.
Please Note: This is NOT scintillating reading. But this could potentially keep the FTC off your back, out of your life and away from your bank accounts, as well as keeping you out of court and away from jail. Enough said.
1: Privacy and Data Collection
To send out marketing emails, you need to collect contact information, right? Sounds simple. But here's the thing - the legalities of collecting the information is far more complex than most marketers realize.
When you think of laws that cover anything pertaining to the Internet, you might be tempted to believe that only the laws where you live apply to you. But the fact is, it's the laws where your customers reside with which you need to be in compliance.
Perhaps the easiest method is to make sure you comply with the strictest of laws. In this manner you should also be compliant with other laws in other states and other countries as well.
So which country or state is the real stickler when it comes to online privacy? Many would agree that would be California and their Online Privacy Protection Act (OPPA). This law requires to you to disclose:
· The types of information your online marketing tactics or websites collect
· How this information might be shared
· The actual process your subscribers and customers can follow to review and (if they want) change the information you have about them
· Your policy's effective date and a description of any changes since then
For your customer's agreement to stand up legally, it is advised that you use a 'clickwrap.' You've seen these and you've even clicked them yourself.
Is it possible this could lower your conversion rate? Maybe. We haven't seen this tested one way or the other. But if you enjoy sleeping at night, we recommend taking this extra step.
Data Transmission and Storage
Well, maybe not.
How and where are you storing that data? It's vital that you can reassure your customers that you are able to keep their data secure. Think of the breaches companies like Target have experienced, and you'll realize you cannot take this lightly, even if you're only collecting email addresses.
Take a look at how Google lists their data protection mechanisms:
We work hard to protect Google and our users from unauthorized access to or unauthorized alteration, disclosure or destruction of information we hold. In particular:
· We encrypt many of our services using SSL.
· We offer you two step verification when you access your Google Account, and a Safe Browsing featurein Google Chrome.
· We review our information collection, storage and processing practices, including physical security measures, to guard against unauthorized access to systems.
· We restrict access to personal information to Google employees, contractors and agents who need to know that information in order to process it for us, and who are subject to strict contractual confidentiality obligations and may be disciplined or terminated if they fail to meet these obligations.
An SSL protects customer privacy by creating a secure connection between your website and your user's browser when the data is transmitted.
In fact, any website you have that collects any kind of data at all should be SSL enabled.
For the uninitiated, SSL is short of Secure Sockets Layer, something you will never need to know. What you do need to know is that SSL is standard for establishing an encrypted link between a web server and browser, ensuring all data that is transmitted remains private.
In essence, you are making it extremely difficult for hackers to access your customers' information. (Nothing is 100% foolproof against a hacker, but you are required to do your best.)
If you're storing data on the cloud, it's best to use a reputable service within your own jurisdiction. This is because some jurisdictions require that data not be transferred out of jurisdiction, or if it is, that it only be transferred to a jurisdiction with similar legal protections.
Choose a data storage service within your own country and you should be fine. (Again, we are not lawyers and this is not legal advice.)
Here's an example from Amazon's website:
6.5 Limitations of Liability. Without limiting the disclaimer of warranties and limitation of liability in the Amazon.com Conditions of Use: (a) in no event will our or our software licensors' total liability to you for all damages (other than as may be required by applicable law in cases involving personal injury) arising out of or related to your use or inability to use the Software exceed the amount of fifty dollars ($50.00); (b) in no event will our total liability to you for all damages arising from your use of the Services or information, materials, or products included on or otherwise made available to you through the Services (excluding the Software), exceed the amount you paid for the Services related to your claim for damages; and (c) we have no liability for any loss, damage, or misappropriation of Your Files under any circumstances or for any consequences related to changes, restrictions, suspensions, or termination of the Services or the Agreement. These limitations will apply to you even if the remedies fail of their essential purpose.
As you can see Amazon is protecting itself from liability in the case of data loss - something we all need to do.
2. Intellectual Property Issues
Let's talk about protecting your own intellectual property, as well as not infringing on the intellectual property of others.
Getting Your Trademark
You need to protect your venture logo design and your business logo. And you can do this by registering a trademark, giving yourself exclusive right to use a specific word or words, design, name or business logo in connection with specific goods and services.
Before registering your trademark, you need to do your research and make sure you're not infringing on someone else's trademark. Your lawyer can do this for you by searching the US Trademark Database, as well as international registers.
You can do a preliminary search of the US Trademark Database yourself, but your intellectual property lawyer will be more adept at doing an in depth search.
In the U.S, you can file your trademark application online using the Trademark Electronic Application System.
Intellectual Property Rights
Copyrighting any original marketing language you use can be an excellent idea to protect your property. For example, a slogan is definitely worth copyrighting to prevent competitors from using it.
And inserting an intellectual property rights clause into your website is a must. In it you will list your intellectual property types, verify you do not own third-party names or trademarks that appear on your website and so forth.
This is generally copy and paste straightforward, and you can find numerous examples on the internet. As always, consult a lawyer.
3. Truth in Advertising
The FTC requires that your marketing messages not mislead consumers. This includes ALL messages, not just sales letters.
Unfair or deceptive advertising is obviously prohibited. You must not only tell the truth, but also tell the whole truth. That is, you cannot leave out relevant information that might affect a buying decision.
For example, if you are teaching people how to make moneyin the Florida Keys and a boat is needed to do this, you better tell them they need a boat.
Be very careful when you compare your product to other products. If you're not being fair and transparent, you are breaching advertising standards.
Make sure descriptions are 100% true, that descriptions are completely accurate, and that you state facts and not fantasy.
If you are making income claims, you've got to be twice as careful. This is an extremely important topic if you're in the online marketing niche, which is why next month we are going to cover how to make income claims that DON'T land you in hot water with the FTC, along with how to gather and use testimonials.
We will also be covering the Anti-Spam Law, also called the CAN-SPAM law. Most marketers take for granted that they know this law and are already compliant. But surprisingly, this isn't true for the majority of marketers. We will cover these things in depth next month to help your growing business stay safe on the right side of the law.
One last thing - here's the FTC Guide for Selling Internationally. It provides a helpful checklist for determining if your business is 'consumer-friendly.'