The Federal Trade Commission has cracked down on a California based online electronics retailer for allegedly posing as it was based in the U.K. so it could deceive residents there into thinking they had stronger consumer protections.
When U.K. consumers received the cameras, video games and other electronic items, they discovered they had been charged unexpected import duties, were left with invalid warranties, and would be charged hefty cancellation and refund fees if they tried to send the items back.
This is the first case the FTC has brought against a U.S. company exclusively doing business abroad. The U.S. Safe Web Act of 2006 gave the FTC the authority to sue U.S. companies deceiving foreign customers in an effort to prevent the U.S. from becoming a haven for fraud.
The Pasadena, California defendants charged in the case are Balls of Kryptonite, operating websites Best Priced Brands and Bite Size Deals, and its owner Jaivin Karnani. The defendants’ deceptively used websites ending in “.uk”, the complaint alleges, that tricked consumers in the U.K. into purchasing good that carried no manufacturer warranties, misled them about their rights to return items and sent products that were different than the ones displayed on the websites.
The FTC also charged the defendants with deceiving consumers about their participation in a program in which U.S. companies guarantee customers in Europe that they secure their personal information, as required by European law. Known as the EU/US Safe Harbor program, the defendants claimed to participate in it when in fact they did not.
European consumers who want to know if a U.S. company is complying with European law can visit this website.
The defendants have agreed to stop their alleged illegal practices until the case is decided in federal court.
