calculator-385506_640In 1975, the Federal Trade Commission established rules and regulations governing mail and phone based retailers. These regulations specified that unless those retailers could ship the goods purchased within a stated period, or within 30-days if no time period was specified, then the customer could petition for a refund.

Those regulations remained largely unchanged until this year, when the FTC revised them specifically to include online merchants and modern forms of payment. Formerly, those regulations only covered checks, money orders and credit card payments, but now are expanded to include things like PayPal.

And Now, To Particulars

Under the original regulations, if a retailer was unable to meet the shipping requirements, they would have to get the buyer's consent to a shipping delay, or refund the payment made. The revisions to the regulations are part of the Agency's “Internet or Telephone Order Merchandise Rules,” and are set to take effect as of December 8, 2014. If a company does not comply with this new regulation, they can be taken to District Court, and face a steep fine of up to $16,000 per occurrence. That's a healthy enough fine to immediately dissuade e-tailers from playing fast and loose with customers' money, and really, the regulation is win-win.

The customer is protected. That's the first and most important aspect of the revised regulations, but also, legitimate merchants are not hindered or bothered by the regulation in any way, because they will absolutely ship their products on time. Mention the word 'regulations' to most business owners and they'll roll their eyes, and probably say something unbecoming under their breaths about them, but this is one of those rare, shining examples of how regulation can be good for everyone. Well, everyone but the scammers, of course, and that's the entire point. With this update, scam artists who set up slick looking, cookie cutter websites designed to get people to open their wallets, only to disappear without ever actually delivering whatever was promised, get put on notice.

No Longer

There will soon be an official remedy for anyone who gets suckered by the legion of scam artists on the web. It's certainly not a cure-all, and it remains to be seen how much will the FTC has in terms of enforcement, but on the heels of the recent announcement, you can bet that the shady vendors on the internet are rethinking their business plans.

One of the downsides to Internet Neutrality is that it makes it very easy for anybody to be seen, heard and found on the web, and unfortunately, that includes vendors of questionable reputation with no actual products to ship. The recent FTC ruling is an important piece of the overall puzzle that helps to ensure that assuming the FCC doesn't kill Internet Neutrality in its entirety, the free internet will be a good bit safer for those who ply its waters.

Sadly, it's too early to say yet if we'll keep a free and neutral internet, but playing the role of the optimist and assuming we do, this ruling is a lesson in regulatory excellence.