On July 8, 2020, the Federal Trade Commission announced that it has charged an online marketer with falsely promising consumers next-day shipping of facemasks and other personal protective equipment to deal with the coronavirus pandemic.
In a federal court complaint filed in the Eastern District of New York, the corporate defendant and its owner are alleged to have promoted PPE as being “in stock,” and “Pay Today, Ships Tomorrow” on its website. According to the FTC, however, it took weeks for PPE to be shipped customers.
According to the FTC’s complaint, the company received hundreds of complaints about the shipping delays through emails, phone calls and website chat messages. The Commission alleges that some of the complaints were from customers who were in urgent needed PPE, including one customer who purportedly ordered disposable masks for child welfare workers making in-home visits; another who ordered masks for a family member who is a nurse; and a third who ordered masks for her immunocompromised mother.
The FTC alleged that the company’ deceptive tactics violated the FTC Act, and that the company also violated the FTC’s Mail Order Rule, which requires that companies advertising that they can ship merchandise within a certain timeframe have a reasonable basis for the promised timeframe. The Rule also requires that, if companies find they cannot meet the promised timeframe, they must seek the customer’s consent to the delayed shipment, or refund their money.
The FTC alleges that the company failed to notify consumers, seek their consent to delayed shipments, and that refunds were not issued.
In addition to purported false claims about next-day shipping, the FTC also alleges that some of the other merchandise sold through the applicable website was falsely advertised as “authentic” or “certified.”
Unscrupulous merchants are taking advantage of consumers in their hour of need by not delivering goods—including masks and other personal protective equipment—as promised, and failing to provide required refunds,” said FTC attorney Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “The FTC will not tolerate this, and we are working closely with criminal authorities to put a stop to it.”
The U.S. Attorney’s Office for the Eastern District of New York concurrently brought a criminal case against the owner alleging that he engaged in price gouging and mail and wire fraud.
This matter should be of interest to digital marketers, including those that disseminate express or implied shipping claims. Consult with an experienced FTC defense attorney to discuss the implementation of preventative compliance protocols.
According to figures released by the FTC, online shopping problems like the ones cited in the FTC’s complaint are the largest source of coronavirus-related complaints the agency have received from consumers since the start of the pandemic.
Richard B. Newman is an FTC attorney at Hinch Newman LLP. Follow him on Twitter @FTC defense attorney.
Informational purposes only. Not legal advice. May be considered attorney advertising.
