Ignorance is NO Excuse: 3 Legal Mistakes That Can Spell Doom For Your Business… and Personal Assets
Ignorance is No Excuse: 3 Legal Mistakes That Can Spell Doom For Your Business… and Personal Assets
By Chip Cooper, Esq.
Are you an entrepreneur or a small business owner?
Do you find yourself constantly working on a dozen different tasks at once to keep your business running smoothly?
Tasks like writing sales copy, communicating with suppliers, providing customer support, developing new products, and so on?
If so, then your company may be in serious danger of getting sued & shut down…and you might not even know it.
What’s this all about?
In the struggle and toil of running your own business, there’s one task that is frequently forgotten or pushed to the side. And that task is putting the right legal systems in place to protect your business from an FTC lawsuit.
Unfortunately, neglecting this one vital task can put your entire company out of business! It happens all the time, even to highly successful companies with ethical and well-meaning owners.
See, the FTC doesn’t care how useful your product is, how persuasive your marketing is, or how awesome your team is. If you don’t follow their rules, they can and will investigate your company, shut down your business, and even seize your personal assets.
Here are the 3 most common legal mistakes that lead to small businesses being shut down by the FTC:
Mistake #2: You Are Using Testimonials Or Customer Endorsements
As you know, a few good testimonials can do wonders for your marketing. Testimonials are a form of social proof, which can be very persuasive to a consumer. The FTC knows this, and that’s why they pay very close attention to testimonials.
The FTC has very specific guidelines that you must follow with all your testimonials and endorsements. You must be able to prove that your endorsements are truthful & not misleading, and that any specific claims are typical of what the average user can expect. Finally, you must clearly disclose any connection you have with your endorsers.
If the FTC finds that your testimonials don’t follow these guidelines, then they will quickly take action to shut you down.
Mistake #3: You Think The FTC Doesn’t Care About Small Businesses
Unfortunately, many entrepreneurs ignore warnings like this because they think that the FTC isn’t interested in small businesses. They think the FTC is only after the “big fish.” Well, I have some bad news for you:
The FTC is now going after “the little guys.”
In 2009, the FTC started cracking down on online marketing claims by going after “the big fish” (huge companies like Google and Snapchat). But starting around 2014, the FTC started going after “the little guys”—startups and other small businesses like yours.
Today, you can rest assured that the FTC will go after anyone for violating their policies…even if you run a startup or a very small business.
To make matters even worse, did you know that the FTC can seize your personal assets like your car and your home…even if you’ve formed a protective entity like a corporation or an LLC?
Most people don’t know this, but forming a corporation or an LLC will only protect your personal assets from civil litigation—not federal litigation (like the FTC). All the FTC has to do is put your name on their investigation form, and that will give them the ability to freeze your personal assets in order to investigate your business.
And to make matters even worse, if you get sued for millions of dollars by the FTC you may NOT be able to file for bankruptcy to erase that debt! That’s because an FTC lawsuit is a fraud claim that is not dischargeable in bankruptcy.
As you can see, failing to stay compliant with FTC regulations is a huge mistake that can have disastrous consequences for your company and your personal life. That’s why it’s essential to make sure that your business is 100% compliant with all the FTC’s regulations. The only question is, how do you do it?
Here’s How To Make Sure You, Your Business & Website Is FTC Compliant
By now it should be clear how important it is for you to be FTC compliant. But how can you do that without spending $7,500-$8,000 or more on Internet Attorneys?
Smart business owners around the world are doing it with the help of FTC Guardian.
FTC Guardian is a service that is 100% focused on helping to keep you get and stay FTC compliant and fully protected. And right now, we are offering a free training to give you the knowledge, information, and guidance that you need to stay out of trouble with the Federal Trade Commission.
Free Compliance Workshop: Join Chip Cooper, Esq., the #1 FTC Compliance trainer in the World, for a one-of-kind, completely free online compliance workshop. Workshops fill up quickly, so register now.
Here are some of the things you’ll discover on the training:
- Real-Life Examples of People Who Didn’t Think They Were At Risk, But Who Got Nailed By The FTC, And Why It Could Happen To You, Too
- The 3 Enormous Powers The FTC Has That Can Change Your Life – And Your Family’s Life – Forever!
- How to Avoid FTC Claims When Collecting Leads With Optin Forms
- And Much More…
Remember: legal protection is a massively important part of your business, and it’s one you cannot afford to ignore any longer.
Disclaimer: This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.