For copies of the rules and commentaries relevant to your Internet enterprise, contact: Consumer Response Center, Federal Trade Commission, Washington, DC 20580; toll-free: 1-877-FTC-HELP (382-4357); TDD: 1-866-653-4261. The Franchise and Business Opportunity Rule requires franchise and business opportunity sellers to give consumers a detailed disclosure document at least 10 days before the consumer pays any money or legally commits to a purchase.
The document must include: In addition, companies that make earnings representations must give consumers the written basis for their claims, including the number and percentage of owners who have done at least as well as claimed. MLM - also known as "network" or "matrix" marketing - is a way of selling goods and services through distributors.
These plans typically promise that people who sign up as distributors will get commissions two ways - on their own sales and on the sales their recruits have made.
Pyramid schemes - a form of multi-level marketing - involve paying commissions to distributors only for recruiting new distributors.
The Federal Trade Commission Act allows the FTC to act in the interest of all consumers to prevent deceptive and unfair acts or practices.
In interpreting Section 5 of the Act, the Commission has determined that a representation, omission or practice is The FTC Act prohibits unfair or deceptive advertising in any medium.
In June 1998, the FTC issued Online Privacy: A Report to Congress.
The Report noted that while over 85 percent of all websites collected personal information from consumers, only 14 percent of the sites in the FTC's random sample of commercial websites provided any notice to consumers of the personal information they collect or how they use it.
In addition, claims must be substantiated, especially when they concern health, safety, or performance.
In May 2000, the FTC issued a follow-up report, Privacy Online: Fair Information Practices in the Electronic Marketplace.
While the 2000 survey showed significant improvement in the percent of websites that post at least some privacy disclosures, only 20 percent of the random sample sites were found to have implemented four fair information practices: notice, choice, access and security.
The FTC also launched a special site at help children, parents and site operators understand the provisions of COPPA and how the law will affect them.
Listed here are some FTC laws about specific marketing practices and the promotion of products and services in specific industries.