When you were a kid playing hide and seek, remember those kids who always seemed to be able to find a hidden crawl space or crevice? What happened to them? Let’s hope they don’t go into advertising when they grow up, as current marketing methods provide companies with many ways to hide important terms and conditions. The FTC’s proposed settlement with Network Solutions is a few examples.
For individuals and businesses in the market for website hosting services, Network Solutions prominently promotes its “30-day money back guarantee.” What’s the catch? According to the FTC, the company failed to clearly and conspicuously disclose that its “money back guarantee” did not always guarantee the return of all customers’ funds. In fact, Network Solutions charges customers who accept a domain registration included in their website hosting a “cancellation fee” of up to 30% of the amount paid, meaning the company’s “money-back guarantee” may be voided . A more accurate description would be “not all money back guarantee”.
The complaint against Network Solutions explains some principles that should come as no surprise to businesses who have read the FTC’s guidance publication, “.com Disclosure: How to Disclose Effectively in Digital Advertising.” For example, Network Solutions does not disclose cancellation fees in ads promoting the guarantee or on web pages promoting the guarantee.Instead, consumers must scroll to the bottom of the screen to find this sentence in small font: “* See terms and conditions Free nsWebAddress™ , 30-day money back guarantee and Uptime reliability. ” This screenshot gives you an idea of how small the small fonts can be compared to other fonts used by Network Solutions to communicate their marketing messages. Additionally, hyperlinks sometimes appear blue on a black background, and are often sandwiched between two other font links.
What happens if the consumer actually clicks on the link? A pop-up window appeared, and Network Solutions then began referring to the offer as a “30-day limited money-back guarantee.” Network Solutions has also revealed details of cancellation fees here. The FTC said it was too little, too late to effectively reveal material information.
To resolve the case, Network Solutions agreed to change the way it markets its money-back guarantees and reveal significant limitations. Additionally, the proposed order prohibits misrepresentations regarding refund or cancellation policies, warranties, or any other claims regarding the company’s web hosting services.
What can other companies learn from the settlement? The best advice is not to do what the FTC says Network Solutions is doing. Read .com Disclosures to learn more about how font size, color, position, and proximity to a statement affect whether a disclosure meets the clear and conspicuous standard. The publication also includes helpful guidance on the use of hyperlinks and why companies should think twice before thinking they can promote a claim in a prominent location while hiding additional text behind an obscure and hard-to-find hyperlink.
You may comment online on the proposed settlement until May 7, 2015.
