Suppose a company engages in an unfair and deceptive trade practice. It makes about $1 billion. The FTC investigates. A settlement is reached for a fine of $1 million and refunds to only some customers — yeilding a net penalty of several million dollars — just a fraction of the spoils. That’s deterrence . . . FTC style!
I recently blogged about how the credit reporting agencies were attempting to use their legal obligation to provide people with free annual credit reports as a profit-generating tool instead. Apparently, the rather extreme measures I described in my post are tame compared to what privacy expert Bob Gellman describes in a DM News column:
The FTC charged that, starting in 2000, Experian deceptively marketed free credit reports by not adequately disclosing that consumers would automatically be signed up for a credit report monitoring service costing $79.95 annually if they didn’t cancel within 30 days. The settlement was reported in the Aug. 15 issue of DM News. The case began with a complaint filed by the Electronic Privacy Information Center and with a report from the World Privacy Forum.