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Change is in the Air!
by: Cary Christian

 

There has been a lot of activity of note this past week and I want to address what I see as some major changes on the horizon.

 

For those of you who haven't heard, the Federal Trade Commission, SEC, and other Federal and state law enforcement agencies filed criminal and civil charges against 45 Internet scammers and deceptive s p a m m e r s this week.  Additionally, the FTC and 21 other U.S. and international agencies launched an initiative to get organizations in 59 countries to close the open relays s p a m m e r s use with such impunity.

 

In the first situation, it appears regulatory agencies are finally using the laws we already have available to tackle online fraud in a much broader manner.  In the second situation, they are adopting a plan of action that has some potential to make a dent (although probably a very small one) in the problem of s p a m.  Both approaches are refreshing when compared to most of the useless solutions being pushed today like filters and Habeus.

 

Granted, neither action in and of itself accomplishes that much relative to the size of the existing problems, but if regulatory agencies continue to work in this manner positive changes will result.

 

Don't get me wrong: I'll be the first to tell you I want less government meddling in our affairs.  I do not want to see an Internet controlled by government agencies.  But what we have now is more like the old wild west with lawlessness running rampant in every corner.  Laws must apply to online businesses in the same manner they do to offline activities.  Businesses must deal fairly with customers and fraud cannot be tolerated.  The business climate for all of us will be better when the seedier online  elements are more under control.

 

I also found some of the targets of these criminal and civil charges to be very interesting.  Sure, there were the envelope stuffing scams and chain letters represented, but there were also programs that most would consider to be fairly normal affiliate business opportunities.  That's where the change really shows.

 

Most of us understand that you cannot join an affiliate program, advertise the same website thousands of other affiliates are promoting and really expect to earn six figure incomes from such activities.  But such programs are everywhere.  The uninitiated come online and flock to them in droves.  All but the top five percent or so in these programs proceed to lose all their money.  Previously, it seemed only the largest, worst and most outlandish schemes were targeted.  That seems to have changed in a big way.

 

For those of you whose online business activities include promoting affiliate programs that involve recruiting others to produce income, you need to take a long hard look at the economics of the business you represent.  It is not only the ultimate owner of the program that might be targeted, but you could be as well.

 

Those of you who run traditional businesses online have to be careful also.  It's time to take a look at your privacy policy, terms of service and any legal disclaimers you have on your site or sites to determine if they are adequate.  Most criminal and civil investigations begin with a complaint from a customer.  If a governmental agency receives a complaint, no matter how bogus it might be, they are likely to check it out.  When they do, if they find your site contains appropriate legal information for your consumers, that will be the end of it.  If your site does not, you could have a serious problem.

 

This is the part you need to understand and the main reason I wanted to write this article at this time.  Human nature and our general reactions to life situations are like a pendulum.  As far as Internet business is concerned, the pendulum swung much too far in the direction of lawlessness.  S p a m and fraud has virtually destroyed email marketing and severely tarnished the image of online business in general.  The pendulum has started to swing in the other direction and, undoubtedly, it will probably swing too far in the opposite direction before it stabilizes somewhere in the middle.  That makes this a very dangerous time for any online business.

 

Understand that government agencies MUST act.  Whether their moves are well-considered and effective is almost irrelevant.  Action is required because people are fed up with scams and s p a m and the infrastructure of the Internet is so burdened by these activities that there really is no choice in the matter.

 

This is just my opinion, of course, but I believe the breaking point has been reached.  All legitimate Internet businesses need to take a long hard look at their activities and their websites and make sure everything is in order.  While I hope governmental reactions will be targeted, I also fear the shotgun approach is possible.  Don't let yourself become a victim of stray buckshot!

 

If you're not sure what rules and regulations might apply to your business, you can get more guidance on the FTC website at http://www.ftc.gov/ftc/business.htm

 

Two other resources you should bookmark for reference are Bruce Safron's Legal eBiz site at http://www.legalebiz.com/ and the Nolo "plain English" law site at http://www.nolo.com/index.cfm

 

Know what is required of you and know your rights.  Knowledge and preemptive action on your part are your best defense.

 

 
Copyright 2003
 

 


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