FTC settles with online retailer that faked UK location

The company shipped electronics from the U.S., giving customers import duties and invalid warranties, the FTC said

The U.S. Federal Trade Commission has reached a settlement with a California-based Web retailer that allegedly deceived U.K. customers into believing they were protected by their country's consumer trade laws by selling them merchandise through websites with URLs ending in .co.uk, the agency said Thursday.

California firm Balls of Kryptonite sold cameras, video games and other electronic goods to British consumers from websites including Bestpricedbrands.co.uk, Bitesizdeals.co.uk and Crazycameras.co.uk, the FTC said in a press release. When customers received the merchandise, they were charged with unexpected import duties, left with invalid warranties and faced difficult cancellation and refund procedures, the FTC said.

The defendants, including owner Jaivin Karnani, promised fast shipping, but often didn't meet the dates, the FTC said. Without the consent of customers, as required by the FTC's Mail or Telephone Order Merchandise Rule, the defendants allegedly shipped the goods much later than promised. When customers tried to cancel the delayed orders, the company offered resistance or no response at all, the FTC said.

In some cases, the websites delivered different products than the ones customers ordered, the FTC said in a complaint filed Thursday in U.S. District Court for the Central District of California. In some cases, electronics had chargers incompatible with U.K. outlets, and in other cases, product manuals were entirely in Spanish or Chinese, the FTC said.

The defendants weren't available for comment.

The FTC filed the original complaint against the company in August 2009. Under the U.S. SAFE WEB Act of 2006, Congress gave the FTC the authority to sue U.S. companies that harm consumers abroad in an effort to discourage fraudulent companies from operating in the U.S.

Under the settlement, the company is banned from charging consumers for goods until they are in hand and ready to be shipped.

The settlement order prohibits the defendants from misrepresenting the location, quality, quantity, characteristics, and model numbers of products they sell, as well as their certification by government-sponsored information security programs. It also prohibits them from misrepresenting their policies regarding cancellation and exchanges, the existence of product warranties, and the total cost of the products sold.

The FTC settlement order also prohibits the defendants from violating the Mail Order Rule, and it imposes a US$500,000 judgment, which is suspended based on the defendants' inability to pay.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

Join the CSO newsletter!

Error: Please check your email address.

Tags U.S. Federal Trade Commissione-commerceregulationJaivin KarnaniBalls of Kryptonitegovernmentinternet

More about Federal Trade CommissionFTCIDG

Show Comments

Featured Whitepapers

Editor's Recommendations

Solution Centres

Stories by Grant Gross

Latest Videos

  • 150x50

    CSO Webinar: Will your data protection strategy be enough when disaster strikes?

    Speakers: - Paul O’Connor, Engagement leader - Performance Audit Group, Victorian Auditor-General’s Office (VAGO) - Nigel Phair, Managing Director, Centre for Internet Safety - Joshua Stenhouse, Technical Evangelist, Zerto - Anthony Caruana, CSO MC & Moderator

    Play Video

  • 150x50

    CSO Webinar: The Human Factor - Your people are your biggest security weakness

    ​Speakers: David Lacey, Researcher and former CISO Royal Mail David Turner - Global Risk Management Expert Mark Guntrip - Group Manager, Email Protection, Proofpoint

    Play Video

  • 150x50

    CSO Webinar: Current ransomware defences are failing – but machine learning can drive a more proactive solution

    Speakers • Ty Miller, Director, Threat Intelligence • Mark Gregory, Leader, Network Engineering Research Group, RMIT • Jeff Lanza, Retired FBI Agent (USA) • Andy Solterbeck, VP Asia Pacific, Cylance • David Braue, CSO MC/Moderator What to expect: ​Hear from industry experts on the local and global ransomware threat landscape. Explore a new approach to dealing with ransomware using machine-learning techniques and by thinking about the problem in a fundamentally different way. Apply techniques for gathering insight into ransomware behaviour and find out what elements must go into a truly effective ransomware defence. Get a first-hand look at how ransomware actually works in practice, and how machine-learning techniques can pick up on its activities long before your employees do.

    Play Video

  • 150x50

    CSO Webinar: Get real about metadata to avoid a false sense of security

    Speakers: • Anthony Caruana – CSO MC and moderator • Ian Farquhar, Worldwide Virtual Security Team Lead, Gigamon • John Lindsay, Former CTO, iiNet • Skeeve Stevens, Futurist, Future Sumo • David Vaile - Vice chair of APF, Co-Convenor of the Cyberspace Law And Policy Community, UNSW Law Faculty This webinar covers: - A 101 on metadata - what it is and how to use it - Insight into a typical attack, what happens and what we would find when looking into the metadata - How to collect metadata, use this to detect attacks and get greater insight into how you can use this to protect your organisation - Learn how much raw data and metadata to retain and how long for - Get a reality check on how you're using your metadata and if this is enough to secure your organisation

    Play Video

  • 150x50

    CSO Webinar: How banking trojans work and how you can stop them

    CSO Webinar: How banking trojans work and how you can stop them Featuring: • John Baird, Director of Global Technology Production, Deutsche Bank • Samantha Macleod, GM Cyber Security, ME Bank • Sherrod DeGrippo, Director of Emerging Threats, Proofpoint (USA)

    Play Video

More videos

Blog Posts

Market Place