Companies To Be Held Liable For Selling To Online Criminals

from the seems-a-bit-extreme dept

One of the reasons why various safe harbor rules exist is to protect parties who really have nothing to do with any kind of law breaking from being liable for the activities of others. Thus, we don’t blame an ISP for the activities of one of its users, even if that user breaks the law. That’s both reasonable and fair. Those who want to blame those providers often do so just because it’s easier — or, more commonly, because they somehow think it’s better for that service provider to somehow act in the role of the police to make things easier. Something similar seems to be happening with the FTC placing the onus on small businesses to make sure they don’t sell to online criminals. Slashdot points us to the news that, starting November 1st, all companies are supposed to compare customer info with a “red flag” list of online identity fraudsters and money launderers. Firms that fail to check may be liable if they end up doing business with “known” criminals. You can understand the reasoning here. It certainly makes it a lot easier for the FTC to try to crack down on these crimes. But it adds significant expense and liability to small businesses for potential crimes in which they were totally uninvolved.

Filed Under: , , , , ,
Companies: ftc

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Companies To Be Held Liable For Selling To Online Criminals”

Subscribe: RSS Leave a comment
Anonymous Coward says:

Re: Re:

I understand the theory behind their reasoning.

That being that a small business doesn’t necessarily know or care how to even check that stuff, so more small businesses than large businesses will end up selling the stuff to criminals.

Its twisted, and very obviously logic that was the first thing to come to their mind and they didn’t bother thinking it all the way through.

If they did the last bit (think it all the way through) they wouldn’t a) look like asses b) look like DUMB asses and c) be pushing this law unless it affects everyone.

Oh and it makes sense for it to affect _all_ businesses. Anyone wanting to do a transaction with a credit card (not on the consumer end of course…got to make it EASY to spend your savings) or something had better play along.

If/when Microsoft starts tanking they’ll have all that information and we wouldnt’ want them selling it to criminals anymore than I want Joe from Joe’s Footwear selling mine.

Nitro says:

Re: Re:

The bank could be responsible if they didn’t follow the proper procedures. (ID check etc. etc…) I get really annoyed when I use my credit card and the person at the register just takes the card and swipes it. It could be anyone’s card. I wish there was some kind of law that they are required to check a picture ID. At least you would have to go through some trouble of making a fake picture ID to get away with running someone else’s card. Or maybe there is a law, but nobody enforces it. I am sure it would carry a heavier fine if you got caught too. Of course, most places get away with having any liability because you can swipe your own card at the checkout. None the less… as a retailer you still hold a certain amount of responsibility depending on the merchandise you sell, but at the same time there is a fine line of what you can really be blamed for as the retailer. Unfortunately common sense has because rather uncommon so we have to have a law for all the stupid people in the world and sometimes some of those stupid people are the ones making the law. That makes it sound rather depressing doesn’t it?

Rose M. Welch says:


…I work for, and own a small business. (Two different businesses.) and I have sooooo many question. What are we supposed to do when we get a match?

All we could provide you with is the shipping/billing address and that should be on the list already because no way I would declare a match because the names are the same.

I live in a small town surrounded by smaller towns and we have four Vicki Brown’s in our customer database. Four of them. We’ve made sure to get their middle initials so we can tell them apart when they come in to shop.

You could get the IP address that they used when making the purchase, but that would require that I store that information for that purpose and I am very much not okay with that. Also, it would probably end up being a library or otherwise public computer.

Imagine my new Privacy Policy.


We will detect and keep your IP address on file along with with all of the information that you give me just in case your name happens to match that of a criminal, in which case cops will soon be beating down your door because I have to tell them everything like a bitch. So please use a false name and a library computer. Thanks!

HADLEY STARKEY (user link) says:

Businees Owner's Compliance Issues - We have A Solution

Pre-Paid Legal Services, Inc. (NYSE: PPD) has a solution for Small Businsss Owners Issues with Compliance with these New Red Flag Rules! We can help you show “Good Faith” compliance with all the FTC’s Rules and Regulations.

Please Call HADLEY STARKEY for more info toll-free @ 1.888.201.0077, or 1.800.204.4139 on how we can assist you at little or no cost to your company in meeting the demands for these regulations like FACTA, Hippa, Gramm-Leach Bliley, and SOX. WE’ve got a comprehensive solution that can be implemented immediately. E-Mail me

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...