FTC Loses one And That’s “OK”

The FTC lost a motion for summary judgment in a deceptive practices act case recently. The FTC filed suit against a company called WKMS, Inc. an online company that referred consumers to payday lenders. According to the FTC, the company’s Web site collected bank account information from consumers as part of the loan referral process. Once that was completed, the site offered the consumers the opportunity to sign up for monthly discount programs through banner ads and pop up windows. The FTC alleged that the site misled consumers and debited their bank accounts without their consent. The FTC asked for a summary judgment — a finding that the case was so clear there was no need to go to trial. But the court said no. What saved WKMS, at least for now? Two things. First, consumers could not sign up for the discount programs without hitting an OK button, indicating their consent to the program. Second, most site visitors didn’t sign up, indicating that people who actually paid attention knew what they were doing. The lesson? If you’re offering a product or service online, the best proof that the consumer actually ordered the stuff is make sure the consumer has to take some affirmative step to make the order. It’s not fool proof, but it may keep the FTC at bay.