Mar 21, 2024

FTC Target Letter

Getting a target letter from the Federal Trade Commission – it’s a very scary process. This means they think you broke consumer protection laws, or mishandled people’s data, or maybe ran misleading advertisements. Try not to panic though. With the right strategy and an experienced attorney, you can handle this situation in a way that protects your business. I’m going to walk you through the most important things to consider when you recieve this type of notice from the FTC.

What’s an FTC Target Letter?

A target letter is basically how the FTC tells you they’re investigating your company. They think you violated laws they enforce – like the FTC Act on unfair competition and consumer protection. The letter spells out exactly which laws they believe you broke. And it shows the evidence they’ve gathered on you so far.

Most importantly, it asks you to produce documents, data, or sit for interviews with FTC staff. This helps them decide if they should file a lawsuit against your company. Target letters are different from Civil Investigative Demands (CIDs) – but both require immediate attention and response.

Read That Letter Very Carefully

The first thing you need to do is read the target letter extremely carefully. Make sure you understand completely what they’re accusing you of. If the allegations aren’t crystal clear, you need to ask them for more clarification. You have to know their full case before you can decide how to respond strategically.

If the FTC’s allegations seem totally off-base, you might not need to cooperate as much. But if they have solid evidence that you violated consumer protection laws – you’ll probably need to negotiate. So analyze their claims carefully, look at the supporting evidence, and review their document requests to gauge how serious this threat really is.

Get an Experienced FTC Defense Attorney NOW

The FTC has massive resources. They have experienced investigators and attorneys who handle these cases every day. So you need to make sure you have an experienced lawyer on your side to respond strategically. Don’t try to handle this alone – it’s too risky.

Find someone who really knows FTC investigations inside and out. This is absolutely crucial to protecting yourself. Your attorney can review the FTC’s claims, write responses to their requests, and negotiate with staff if needed. Don’t enter this fight without a professional by your side who understands the federal investigation process.

Comply Carefully With Document Requests

The FTC doesn’t make document and interview requests lightly. If you ignore them or don’t really comply – it looks like you’re hiding something. And that can lead to them filing enforcement actions or even obstruction of justice charges.

But you also shouldn’t just hand over everything without thinking it through carefully. Work closely with your attorney to decide what you’re required to share and how to share it responsibly. You need to preserve all relevant documents immediately – including emails, Slack messages, and any other electronic communications.

For example, if they want customer data, only provide what’s truly relevant to their investigation. And if they request interviews with employees, prep very carefully with your lawyer first. The goal is to comply fully while avoiding handing over evidence that could support claims you can actually disprove.

Consider Negotiating Early

In many cases, it makes sense to try negotiating with the FTC before they decide whether to file a lawsuit. This means going back and forth with staff to address their concerns without admitting you broke any laws. The FTC often enters into consent agreements that resolve investigations without litigation.

For instance, you could agree to change certain buisness practices without admitting guilt. Or you might negotiate restrictions on future conduct. But you need experienced counsel before trying this approach – done wrong, negotiations could create bigger problems.

Don’t Wait to Respond

While you want to be strategic, don’t delay your response to the target letter. FTC attorneys may see silence or delays as unwillingness to cooperate. And that could make them skip negotiations entirely and just file a federal lawsuit against you.

Talk to your lawyer immediately and start crafting your response. Deadlines for responding to FTC requests are usually very tight. But showing you’re taking this seriously and responding promptly may earn some goodwill and time to negotiate a resolution.

Be Very Careful About Public Statements

Your first instinct might be to publicly defend your company when accused of wrongdoing. But think twice before making any public statements. FTC investigations are typically confidential until they file suit. Speaking out publicly could upset them and trigger more aggressive enforcement action.

Instead, work with your attorney to decide if and when public comment makes strategic sense. Don’t say anything that could weaken your legal position or contradict documents you’ve already provided. Sometimes silence is the best strategy during an active investigation.

It’s Not Over Until It’s Over

Even if the initial allegations seem weak, don’t assume you’re off the hook. The FTC may find additional evidence as they investigate further. So you need to stay engaged with your lawyer throughout the entire process to protect your interests.

And remember – if the FTC does eventually sue, there are still chances to resolve the case through settlements or voluntary compliance. The consent order process allows companies to settle without admitting liability. Many companies successfully negotiate favorable outcomes even after receiving target letters.

The Bottom Line

Getting an FTC target letter is extremely serious – there’s no doubt about that. But taking a thoughtful, strategic approach can help you achieve the best possible outcome. Focus on responding carefully, preserving all documents, and avoiding common mistakes that make things worse.

FTC Target Letter