Free Credit BureauComplimentary credit bureau
com and eFreeScore.com. And for a one-month sign-up charge, these Web pages offer credit ratings, credit reporting, and credit watch.
On of the ways that CBC does deals is through Affiliate Marketing Companies that get referral commission for referrals of clients to the websites. The case concentrates on whether CBC and Brown are accountable for the conduct of two subsidiaries of CBC, Danny Pierce and Andrew Lloyd (who had already agreed with the FTC).
A few short months after Pierce became a CBC subsidiary, he asked CBC to develop dedicated web sites to which he could refer the clients he was referring. CBC' s web sites promoted the idea that clients could receive 'free credit checks and information'. "To a lesser extent, the sites announced that clients registering for the "free" subscription would be included in a $29.94 per capita credit watch per-month monthly subscription.
In order to obtain information on these real estate assets, however, clients first had to obtain credit information through CBC. However, there were no rentals available - which, as you can guess, led to many dissatisfied people. Said the court: "Customers complain that they were never associated with a lessor after receiving credit reports and that they did not recognize that they had been accepted into CBC's credit surveillance team.
" Following the settlement with Pierce and Lloyd, the FTC sues CBC and Brown for alleged breaches of the FTC Act, ROSCA and the Free Credit Reports Rule and soon thereafter receives an interim restraining order. The FTC was given a final verdict by the FTC tribunal at the end of June. It ruled that Craigslist's publicity campaigns infringed the FTC Act by writing: "No rational judges could determine that the Craigslist program did not contain any dishonest or misleading practice because it was rich in substantial false representations likely to mislead a rational user.
" Specifically, the Tribunal pointed out that the Respondents had promoted non-existent or non-entitled rented property. It also found that CBC is responsible for the conduct of its subsidiaries here, as "principals are responsible for the misrepresentation of their representatives under the FTC Act.
" While there was initially a controversy over whether the subsidiaries traded with real authorities, the accused finally acknowledged this point and confirmed that they had reneged on the behavior by "accepting the merits of their effort while being conscious of their mishandling. According to the tribunal, even if the point had not been admitted, it would have made the same determination.
In order to determine that CBC has rattled the behaviour of the subsidiaries, the FTC must show that CBC was aware of the behaviour and gave'long-term consent' by assuming the advantages of the behaviour. It also found that the sites referred to by interested tenants also infringed the FTC Act. It found that shoppers would not comprehend that the "free" offering was to sign up for a $29.94 per months credit surveillance program.
It also found that the sites infringed ROSCA (as customers did not give their explicit agreement to the deal after clarification) and the free credit report rule (as customers did not properly obtain notification that they were eligible for free credit reporting annually). It also ruled that the proprietor of CBC is responsible for CBC' s behaviour.
" Here the tribunal found that Brown was held responsible because he not only created the fraudulent web sites but also knew enough information about the fraudulent Cragislist advertising schema to make him "at least ruthlessly irresponsible to the truth or deliberately ignoring the truth". "Brown, for example, got "extensive customer complaints" and credit reversals.
The case should act as an important keepsake for a marketer to keep a sharp eye on what your partners are doing - and act quickly if there are signs of them being involved in misleading pricing. Only because they run their own business does not mean that they are not blamed for their behavior.