Business owners need to remember to make sure the claims about a product which are presented as statements of fact, such as "malware free", "spyware free", etc. are truthful to avoid claims of deceptive practices from the FTC and State government authorities.
Statements of fact in an advertisement for a product or service are treated differently from statements of opinion. Opinion statements are things such as "the best app of its type available today" or "most appealing backgrounds" or "easiest to use".
The marketers of the Prized app promised people points for playing games, taking surveys, and downloading other apps. Consumers were told they could redeem those points for clothes, accessories, and gift cards. But what was really going on? The app uploaded malicious code onto people’s mobile devices so the defendants could use the phones’ computing resources to help mine virtual currencies like Litecoin, Dogecoin, and Quarkcoin – for the defendants’ benefit, of course.
In addition, the FTC alleged that infecting and taking control of consumers’ devices was an unfair practice. New Jersey challenged those actions as “unconscionable commercial practices.”
The settlement, which names Ohio-based Equiliv Investments and Ryan Ramminger, prohibits material misrepresentations in connection with the marketing or sale of mobile apps or software, and bans software that damages or disables people’s devices or accesses them without authorization. Using people’s devices to mine for virtual currency? The order prohibits that, of course. The settlement with New Jersey also includes a financial remedy.
What’s the message for other marketers? First, virtual currencies may be relatively new, but the unfair and deceptive practices alleged in the complaint are covered by the well-established standards of the FTC Act. Second, just because an app is free doesn’t mean marketers are free to mislead consumers. Third, consent to access a device for one purpose isn’t a “make yourself at home” invitation to use it for other purposes without consumers' approval.
Original article at FTC.gov
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