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Posts Tagged ‘Federal Trade Commission’

T-Mobile’s Reputation Could Take a Big Hit From FTC Allegations About Fake Fees

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T-Mobile has fashioned an entire marketing campaign around the benefits to customers for making the switch to their services, promising to pay up to $650 for any fees incurred for coming over to their side. So it’s especially damaging that the Federal Trade Commission is charging the mobile service provider with duping customers into paying fees they shouldn’t have been on the hook for.

In its complaint, the FTC says T-Mobile has made “hundreds of millions” of dollars charging customers for the ability to send “premium” text messages that they didn’t ask for. T-Mobile allegedly pocketed 35 to 40 percent of the $9.99 per month typically charged. This practice is called “cramming” and, back in November, according to CNET, carriers agreed to ban the practice. Moreover, T-Mobile has said that it will help customers recoup fees from third-party providers who charge for these services.

T-Mobile CEO John Legere has vehemently denied the charges in two different posts on the T-Mobile site, which have both been repeatedly tweeted out to his followers.

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Snapchat Admits That It Made Up All That ‘Privacy’ Stuff

snapchatWe’ve known for some time that Snapchat‘s privacy claims don’t quite add up, and today the network and the Federal Trade Commission have reached an agreement on that point.

What does this mean? Basically, Evan Spiegel and company will officially admit that snaps don’t really “disappear forever” (they never did) and that recipients may, in fact, preserve the images/clips indefinitely in several ways without letting the sender know.

Here’s the big one: in addition to the false claims about disappearing snaps, the company also copped to collecting and transmitting user data despite claims to the contrary–and its recent security breach theoretically allowed hackers to collect that data.

Sound familiar?

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The FTC Doesn’t Understand Native Advertising, Either

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Now tell us what you really think.

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Advocacy Group Calls Out Baby App Developers for Deceptive ‘Educational’ Claims

A recent study has shown that some toddlers are getting so addicted to tablets and smartphones that they actually require therapy to cope with having the devices taken away. Seriously.

In light of this rather disturbing trend, it’s really no surprise that advocacy group Campaign for a Commercial-Free Childhood isn’t too thrilled with companies making unsubstantiated claims about the educational value of apps for babies.

CCFC recently filed a complaint with the Federal Trade Commission, stating that marketing claims made by app developer Open Solutions, including “entertain and educate your baby” and “new and innovative form of baby education” were deceptive. In response, Open Solutions dropped the phrases in question from their advertising.

While CCFC was satisfied with Open Solutions’ changes and subsequently withdrew its FTC complaint, the advocacy group has now set its sites on other creators of baby apps like Fisher Price. Read more

FTC to Review Anheuser-Busch’s Claims that Coors Light Cans Have Been Overhyped

Ever feel like advertisers are just corporate versions of children who fight on the playground and then whine to the teacher about who broke the rules or who hit who first? Stories like this sometimes make us wonder if the FTC feels like it’s managing a classroom full of brawling kindergarteners.

MillerCoors has made some pretty lofty claims about its Coors Light can of late, calling it “the world’s most refreshing can,” promising a “smoother, more refreshing pour,” and even claiming that the can “could change everything … this technological masterpiece will revolutionize barbecues, beach parties and tailgates.”

But what does any of that actually mean? Is the can truly technologically superior to other beer cans? Does it really make beer taste better? That’s what competitor Anheuser-Busch would like to know, so it filed a complaint with The National Advertising Division of the Advertising Self-Regulatory Council, which investigates complaints to ensure advertisers don’t overstep federal regulations.

In hopes of settling the matter, the council attempted to engage MillerCoors in a review of its claims. Generally, it’s a good move for advertisers to play ball with the ASRC, as doing so can prevent government involvement. MillerCoors, however, refused to participate in the review, prompting the council to forward the case to the Federal Trade Commission. Read more

America’s Most Misleading Product Claims

POM WonderfulWe recently told you about the FTC’s crackdown on POM‘s “wonderful” health claims. But POM is by no means the only player in the how-far-can-we-push-this ad game. Now, via 24/7 Wall Street, we bring you a list of America’s most misleading product claims in recent memory (the list is theirs, the comments are ours).

1. Topping the list (surprise, surprise), is POM Wonderful and its promises that consumers could literally “cheat death” by sipping pomegranate juice out of a neat looking bottle. While the juice has been shown to provide some health benefits, the FTC found that POM’s claims were not substantiated by two randomized controlled trials — as required by law before such health claims can be made — and were therefore misleading and deceptive. But don’t feel too duped, America; we weren’t the first to be intrigued by pomegranates. Just ask Persephone.

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The FTC Hates Robo-Marketing Calls Too!

OK, Joe Public, here’s your chance.

The Federal Trade Commission will issue $50,000 to anyone who can stop robotic marketing calls that are not only illegal, but also constitute crimes against human sanity. As the public well knows, previous efforts to regulate these annoying calls over the years have achieved only limited success–and now the FTC is seeking help wherever it may be found.

David Vladeck, director of the FTC’s Bureau of Consumer Protection, explains: “The FTC is attacking illegal robo-calls on all fronts, and one of the things that we can do as a government agency is to tap into the genius and technical expertise among the public.”

The search runs from October 25 to January 17, and applicants must find ways to stop robo-calls on landlines, cell phones, or both (which will result in a higher score). Of course, the subsequent media attention will then catapult the winner into the cultural stratosphere, where they will forever live as an icon to everything that is good in the universe. (So get busy people!) Read more

New Study: Fake ‘User’ Reviews Are Here to Stay

We recently posted a story discussing whether fake “user” reviews posted to social media and retail sites on behalf of clients could be considered acceptable PR tools. The overwhelming response we received from PR professionals strongly hinted at a critical consensus: While the practice is somewhat common, it is never OK.

Gerard F. Corbett, Chairman and CEO of the Public Relations Society of America, even weighed in to state unequivocally that posting reviews under fake names is unethical and should not be tolerated by any respectable PR organization.

Unfortunately, researchers behind a newly released Gartner study believe that the practice will only continue to grow despite our ethical quandaries. It’s a bit of a chicken-egg scenario: As consumers conduct more of their research and shopping online, positive social media reviews will become more and more important to brands—and in the rush to establish and expand a product’s online reputation, quite a few individuals will end up breaking the rules. (Researchers place the percentage of fake reviews at 10-15% by 2014.)

According to Gartner, someone will pay for cheating—and soon.

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Pom Uses Parts of Judge’s Ruling To Defend Health Claims

A judge ruled in favor of the Federal Trade Commission this week, finding that Pom Wonderful, makers of the pomegranate juice in the curvy bottle, made inflated claims about the healthy properties of its product. Without the evidence to back up assertions that it can reduce the risk of heart disease, prostate cancer, and other ailments, the company cannot make these sorts of assertions for the next 20 years, the judge said.

Judge D. Michael Chappell also said, however, that there are some health benefits to pomegranates and their juice. Pom has latched on to these particular quotes and is using them in a new ad that continue to argue the company’s point.

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Facebook Settles Privacy Case, Says It Made a ‘Bunch of Mistakes’

Facebook has settled its privacy case with the Federal Trade Commission, which has been ongoing since 2009. The case stems from a change in Facebook’s privacy settings that year that made once private info public without warning. The company isn’t paying anything as part of the settlement, but, like Google, which settled its own privacy case, must have its privacy standards assessed by an outside group for the next 20 years and requires the social network to get the OK from people before it makes changes.

And the FTC really put its foot down with this mandate: “The proposed settlement bars Facebook from making any further deceptive privacy claims.” You can’t break the law again Facebook! Or else! (They typed the “or else” really hard on the keyboard for emphasis.)

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