Electronic Retailer - April 2012 - 13

INDUSTRY REPORTS

FTC Forum

Going Mobile
BY LESLEY FAIR

The Who’s 1971 chart-topper Going Mobile was a paean to life on the open road. Fast forward more than 40 years and it could be the unofficial theme for the changes electronic retailers are facing as they make the transition to the mobile marketplace. As people – and deals – go mobile, the Federal Trade Commission (FTC) reminds companies there’s one constant they can bank on: Wellsettled consumer protection principles still apply. Here are some tips for keeping you in know as your business is on the go: • Proof truth. One myth that needs to be dispelled is that the mobile space is the Wild West when it comes to truth in advertising. Not so. Regardless of how you communicate with customers, you need solid proof to back up your claims. That’s the message savvy marketers take from recent FTC law enforcement actions involving representations about apps or conveyed via apps. • Credit (reports) where credit is due. Even when transactions go mobile, FTC rules and laws still apply. For example, the Fair Credit Reporting Act kicks in when companies pull together certain kinds of information for the purpose of providing credit reports to third parties. But legal obligations don’t end there. If your company uses information from credit reports, the FCRA establishes dos and don’ts for you, too. The FTC sent warning letters to marketers of six apps offering background reports about people’s criminal histories. Employers often use information like that when screening job applicants. As the letters cautioned, “If you have reason to believe

One myth that needs to be dispelled is that the mobile space is the Wild West when it comes to truth in advertising. Not so.

that your reports are being used for employment or other FCRA purposes, you and your customers who are using the reports for such purposes must comply with the FCRA.” But what if the app developer has a disclaimer on its site saying that reports shouldn’t be used for FCRA purposes? Disclaimer or not, the FCRA would still apply, according to the warning letters. • All kidding aside. When it comes to mobile technology, the youngest consumers are often the earliest adopters. Children’s use of mobile apps is Mom or Dad’s call, of course. But parents need the facts so they can decide what’s best for their kids. According to a recent FTC staff report, app store descriptions may not offer the information parents need to determine what data is being collected from their children, how it’s being shared, or who will have access to it. Companies need to be careful about privacy considerations in the mobile marketplace – a particular concern when kids are involved. • “Show me the mobile payment!” There’s no doubt that how consumers pay for things is changing. On April 26, 2012, the FTC is hosting a workshop in Washington, D.C., to examine the consumer protection ramifications of mobile payments. It’s free and open to the public. Lesley Fair is an attorney with the FTC’s Bureau of Consumer Protection.

April 2012 | electronicRETAILER

Electronic Retailer - April 2012

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