The Internet provides a rich environment for creative communication. Used with care, it can assist in increasing product safety. But in their enthusiasm to capitalize on its power, some companies are increasing their liability potential.
• A company president was not aware of a product on his company’s website. The marketing department put it there because it was a product they were thinking about developing.
• A Vice President of Administration was unaware they even had a website.
• Operator instructions normally in the manual provided with the product were posted on the website, but warning labels were left out.
• Information discussed in a chat room established to promote communication with customers was laying the groundwork for discovery of a design defect. No one was putting the pieces together.
• A manufacturer of an electrical product used their website to give technical instructions about a retrofit. They did not include important safety instructions.
These are just examples of some of the situations companies have encountered. To help identify and avoid areas of potential website vulnerability companies should give careful consideration to information or features on their website.
Key topics to consider
• Advertising and marketing material
• Technical specifications
• Assembly instructions
• Recalls, retrofits, field modifications, technical bulletins
• Service and maintenance instructions
• Chat groups
• E-mail addresses
• Testimonials or test results
• Pricing
• Warranties and disclaimers
Some websites contain the exact marketing information that has been available in print and distributed to potential customers. This can make communicating easier and probably save some money. And still others are making their site a living environment by including real time chat groups. Is more better? Maybe. Maybe not.
In all cases, companies need to be aware of what the legal system requires of them and for what they may be held accountable. Analyze the positive or negative long term implications of information included or excluded.
Laws and their interpretation can vary from state to state. However, the usual bases for the imposition of strict liability are design defect, manufacturing defect and/or product communication defect (labels, warnings, instructions, etc.). Subsets of these include inadequate testing as well as marketing defects such as deceptive advertising, false assurances that a product is safe and concealing the truth about unsafe products.
Other components of a product liability claim may include fraud, negligent misrepresentation, and innocent misrepresentation. Innocent misrepresentations do not have to take a verbally precise form. They can be implied in illustrations, packaging, advertisements, instructions, labeling, etc. The government branch that oversees your website material is the Federal Trade Commission (FTC). The Federal Trade Commission Act gives the FTC the tools it needs to act in the interest of all consumers to prevent deceptive and unfair acts or practices in any medium. Advertising must tell the truth and not mislead consumers. A representation about a product may make it vulnerable if relevant information is left out or if the representation implies something that is not true.
In addition, claims must be substantiated, especially when they concern health, safety or performance. The type of substantiation required may depend on the product, what is said about it and what experts believe necessary. If your ad specifies a certain level of support for a claim (“tests show X”) you must have at least that level of support.
Sellers are responsible for representations they make about their products and services. Third parties, such as advertising agencies or website designers and catalog marketers, may also have some exposure.
Items to be avoided on a company website
• Untrue information abusing the gullibility of the consumer or exploiting his or her lack of knowledge or inexperience;
• Inaccuracy, ambiguity, exaggeration or omission which could mislead the consumer;
• Representations that cannot be objectively substantiated;
• Fictitious endorsements presented as though they were genuine testimonials;
• Unfair comparison with other businesses or their products;
• Omission of required legal statement;
• Warnings and instructions that are inaccurate or incomplete;
• Pictures or illustrations of products being used without guards or proper personal safety equipment.
• Outdated, obsolete, or discontinued products or services
Website sales activities and security
Security breaches are a daily event. Hackers find ways of getting into databases and information considered secure and safe is compromised. Passwords are easily cracked. Customer lists along with all their information is compromised. Lately it appears that the greater threat is from one’s own employees; insider hacking. There is software available to help protect systems from outside hackers. There is also software to monitor the kinds of queries employees are running which will alert managers in the event of unusual activities.
Companies may be held liable for damages if their lack of attention to security leads to breaches and customer information is compromised. Techniques such as encryption, frequent changes of passwords, monitoring employees, and restricting internet access can be helpful. Computer security consultants can help companies establish and maintain an overall computer security approach to help minimize the likelihood system breaches.
Additional tips to help companies avoid potential liability with a company website include:
• Treat it with the same level of attention given to a new product design. There should be reasoning behind the posted material.
• A person or committee should be responsible for overseeing the site and is responsible for updates.
• Proper spelling and grammar and technical accuracy are essential. Beware of what words imply or connote. Consultation with a technical writer may help here.
• Instructions must include related safety information with the possible addition of associated labeling.
• Avoid absolute statements, unless testing and documentation can support the claim.
• Website information should be updated at the same time as written material. Keep documentation about changes.
• There should be company guidelines for employees responsible for exchanging information over the Internet. These guidelines should spell out what is appropriate and how the information is to be exchanged.
• Be aware of language issues, especially if your product is marketed to users whose primary language is not English.
• Consult with an attorney who is knowledgeable about the laws involved.
Always keep in mind that what is on your website is available to all. Its content is another piece of documentation that could be used by you in defense of an allegation or against you by a plaintiff.