both SEC and FTC DO NOT proactively seek out businesses and check up on them, testing them. instead they sit on their hands and wait to receive reports of dishonest practice.
the only time they would become active is to search around for businesses doing alot of money movements and only then be willing to get involved.
that being said i truly feel (even as a businessman with many projects running) that consumer protections rules and rights should come far far ahead, and respected far far more then crappy political and financial regulations.
i think that if everything was aimed at ensure smooth and stable trade where consumers are protected. then everything would be great.
imagine simple rules that all state/country businesses had to obide by
1. cannot INTENTIONALLY ship goods or services, digital property or funds more than a month after payment
2. cannot deny refund unless its 14 days after shipment(as long as customer returns/not received their part of agreed 'produce')
3. offers repair or replacement warrenties for a satisfactory period of use 1-5 years
4. business does not cost customers more than whats agreed/advertised
5. anything classed as illegal shall not be advertised/traded
it wouldnt matter if its bitcoins, goods or services.. a breach of basic consumer rules can easily be adhered to.
those 5 basic rules would obviously cover terrorist/drug related stuff (rule 5) thus making political regulations obsolete and streamlining legitimate bitcoin /non bitcoin businesses under one umbrella of policies to follow.
Topic: The Effectiveness of the FTC in Perspective (Read 1129 times)
The thing that I learn from hanging out in scambusting forum and sites is that department dealing with anti fraud and white collar crime is surprisingly starved of resources(underfunded,understaffed etc).Furthermore it takes time to gather enough evidence to press charges.This is why there are so many types of fraud blatantly parading their wares around.They knew that if they stay under the radar long enough ,chances are they could escape with their loot before any enforcement authorities could clamp them.Thing are even worse for international scams/scams that aren't based in the USA(Banners Broker,Just Been Paid etc) .
The adage that its is more profitable and easier to rob you with a keyboard than a gun most definitely apply here.
FTC is a deterrent. Without it, there will be millions more fraud.
Bollocks; first of all you ignore the $300M in redress and disgorgement. There, the FTC just paid for itself.
Further more, even if the FTC didnt recover a penny for customers or taxpayers, and ignoring all the other work the FTC does, it would still serve a very important role, that of a deterrent. Perhaps not a big enough one, but its certainly better than none and I guarantee you that this case will make other US based mining companies think twice about their illegal business practices (AMT, Im looking at you).
As for BFL shipping and finally issuing some refunds, has it occurred to you they started doing this only after the FTC began asking questions?
Further more, even if the FTC didnt recover a penny for customers or taxpayers, and ignoring all the other work the FTC does, it would still serve a very important role, that of a deterrent. Perhaps not a big enough one, but its certainly better than none and I guarantee you that this case will make other US based mining companies think twice about their illegal business practices (AMT, Im looking at you).
As for BFL shipping and finally issuing some refunds, has it occurred to you they started doing this only after the FTC began asking questions?
After seeing the overwhelmingly jubilant attitude of the community in the wake of Butterfly Labs being shut down, I thought it would be good to examine how effective the FTC is in doing its job of "Protecting America's Consumers". Perhaps it will shed some light where it really belongs - not on a company that may or may not be scamming customers, but on a regulatory agency that provides very little protection, enforcement, or benefit, at great cost to the consumer.
According to the FTC's website, in 2013 there were just over 2.1 million complaints filed against companies. These 2.1 million complains led to 79 consumer protection actions filed, 137 consumer protection orders obtained, and 24 antitrust enforcement actions.
In other words, the FTC filed action once for every 25,000 complaints received, or obtained an order just once for every 15,000 complaints. In the case of Butterfly Labs, action was filed after less than 400 complaints filed, or less than .0002 of all complaints filed in 2013. Clearly, either consumer complaints are not a good indicator of action that should be or is taken, or there is some other reason for action after so few (relative) complaints. Unfortunately I didn't have actual data showing the the companies actions were taken against and how many complaints were filed against them, so we can't be sure if this is an anomaly or average.
The FTC proudly boasts that, in 2013, "767,744 consumers received redress totaling over $23.27 million." Doing some simple division shows that on average, consumers received about $30.00 as a result of FTC's action.
The department had an estimated 2013 budget of $300 million. If, instead of operating, the FTC were shut down and every person that filed a complaint had been given a proportional share of the budget, the result would be that each person filing a complaint would have received over $140, or almost 5x the money they actually received as a result of the FTC's actions. If only those who were given redress were paid, that number would almost triple, to $390.
Even if Butterfly Labs is/was a scam, it would seem pretty evident that the FTC does very little to stop scams, and very little to help people recover from them financially. It costs 13x more to operate than it pays back to consumers.
Even though it may seem like a win for Bitcoin that action was taken, it serves only to perpetuate dependence on the state as a way of life. It sets a dangerous precedent - similar to the BitLicense proposal - that Bitcoin companies will be treated more harshly than other companies, and that action will be taken against them faster than with others. The community screams and whines at the suggestions from New York, yet cheer for this action taken from Washington. Let's not forget that BFL was shipping and issuing refunds. Until the FTC stepped in.
https://www.youtube.com/watch?v=xhYJS80MgYA
all numbers taken from: http://www.ftc.gov/system/files/attachments/stats-data-2013/statsdata2013.pdf or other FTC documents on their site.
According to the FTC's website, in 2013 there were just over 2.1 million complaints filed against companies. These 2.1 million complains led to 79 consumer protection actions filed, 137 consumer protection orders obtained, and 24 antitrust enforcement actions.
In other words, the FTC filed action once for every 25,000 complaints received, or obtained an order just once for every 15,000 complaints. In the case of Butterfly Labs, action was filed after less than 400 complaints filed, or less than .0002 of all complaints filed in 2013. Clearly, either consumer complaints are not a good indicator of action that should be or is taken, or there is some other reason for action after so few (relative) complaints. Unfortunately I didn't have actual data showing the the companies actions were taken against and how many complaints were filed against them, so we can't be sure if this is an anomaly or average.
The FTC proudly boasts that, in 2013, "767,744 consumers received redress totaling over $23.27 million." Doing some simple division shows that on average, consumers received about $30.00 as a result of FTC's action.
The department had an estimated 2013 budget of $300 million. If, instead of operating, the FTC were shut down and every person that filed a complaint had been given a proportional share of the budget, the result would be that each person filing a complaint would have received over $140, or almost 5x the money they actually received as a result of the FTC's actions. If only those who were given redress were paid, that number would almost triple, to $390.
Even if Butterfly Labs is/was a scam, it would seem pretty evident that the FTC does very little to stop scams, and very little to help people recover from them financially. It costs 13x more to operate than it pays back to consumers.
Even though it may seem like a win for Bitcoin that action was taken, it serves only to perpetuate dependence on the state as a way of life. It sets a dangerous precedent - similar to the BitLicense proposal - that Bitcoin companies will be treated more harshly than other companies, and that action will be taken against them faster than with others. The community screams and whines at the suggestions from New York, yet cheer for this action taken from Washington. Let's not forget that BFL was shipping and issuing refunds. Until the FTC stepped in.
https://www.youtube.com/watch?v=xhYJS80MgYA
all numbers taken from: http://www.ftc.gov/system/files/attachments/stats-data-2013/statsdata2013.pdf or other FTC documents on their site.
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