Another Nail in the OG Coffin

[kt4ye]

I have just learned that North Carolina Senate Bill 625, aimed at Deceptive Floral Advertising, was signed into law on June 26.

Here is a link to the bill.

http://www.ncga.state.nc.us/Sessions/2009/Bills/Senate/PDF/S625v1.pdf

This bill is an improved version of a bill passed some two years ago. The previous bill attempted to prohibit deceptive advertising by banning ads that deceptively misrepresented the location of the advertiser. The problem with the original law was that it only "worked" if the NAME of the business misrepresented the location.

In other words, an out-of-state ad in the Yellow Pages or Online from "Joe's Charlotte Flowers" would be illegal. The same ad from, "Joe's Flowers." was perfectly legal -- even if the ad's text was deceptive.

Consequently, the original law was not very effective.

The new law declares an ad to be deceptive if the name of the business, or any other part of the listing or ad misrepresents the geographical location of the advertiser. This revised law should be highly effective in reducing or eliminating deceptive (OG) advertising in North Carolina.

I played a modest (very) role in this program when I identified the flaw in the original law and suggested the changes that were adopted.

The REAL heroes were a dedicated group of florists, spearheaded by Jon Miller (no relation -- darn!) with Floral Dimensions in Durham, NC and the proactive assistance of the Greater Durham Chamber of Commerce. They worked with the NC legislature to get the bill introduced and lobbied successfully for its adoption.

As Yogi Berra used to say, "It ain't over 'til it's over!"

Bill

 

[RWK]

Bill, With this new law - What penalties, if any, will the phone directory /phone book/ online directory PUBLISHERS and EDITORS face with this new ruling?

Does it affect the publisher or just the advertiser?

 

[kt4ye]

Bill, With this new law - What penalties, if any, will the phone directory /phone book/ online directory PUBLISHERS and EDITORS face with this new ruling?

Does it affect the publisher or just the advertiser?

Hey Ricky...

Penalties are primarily aimed at the advertiser. They can be quite severe since they are based on the number of days that the ad appears. In the case of a directory ad (that cannot be changed) that penalty can be in the $100,000 range or more.

There is a hold-harmless clause in the statute provided that the publisher accepted the ad in good faith. So, an action item for me and others is to contact the local publisher (ATT, Yellow Book, etc.) as well as Yahoo, Google etc (pay per click) and advise them that they are running ads (giving specifics) in contravention of NC law.

That action, when properly documented, removes the "good faith" shield, and subjects them to the same penalties as those imposed on the advertiser. For media, however, the penalty is for every advertiser whose ad violates NC law.

THAT could be MILLIONS of dollars in penalties if they run the ads for a year.

And YES, the Attorney General of NC will inforce the law. (With appropriate "nudging.") They took action last year against two OGs with business names that misrepresented their location. No fines, as far as I know. Just cease and desist.

But they did NOT take action against the other dozen or so that I complained about, because they were NOT misrepresenting their location in their business name. Hence the new law.

Bill

 

[inferno63]

Hey Ricky...

Penalties are primarily aimed at the advertiser. They can be quite severe since they are based on the number of days that the ad appears. In the case of a directory ad (that cannot be changed) that penalty can be in the $100,000 range or more.

There is a hold-harmless clause in the statute provided that the publisher accepted the ad in good faith. So, an action item for me and others is to contact the local publisher (ATT, Yellow Book, etc.) as well as Yahoo, Google etc (pay per click) and advise them that they are running ads (giving specifics) in contravention of NC law.

That action, when properly documented, removes the "good faith" shield, and subjects them to the same penalties as those imposed on the advertiser. For media, however, the penalty is for every advertiser whose ad violates NC law.

THAT could be MILLIONS of dollars in penalties if they run the ads for a year.

And YES, the Attorney General of NC will inforce the law. (With appropriate "nudging.") They took action last year against two OGs with business names that misrepresented their location. No fines, as far as I know. Just cease and desist.

But they did NOT take action against the other dozen or so that I complained about, because they were NOT misrepresenting their location in their business name. Hence the new law.

Bill

Brilliant work. I am using this bill as a starting point to shake up things in Ohio. Thank you for all of your hard work for the industry.

 

[theRKF]

So, JB, you quakin'? Losin' some sleep?

Or did that nail miss you entirely?

Movin' on ... business as usual

 

[Mikey the Flower Guy]

So, JB, you quakin'? Losin' some sleep?

Or did that nail miss you entirely?

Movin' on ... business as usual

lollollollol

 

[kt4ye]

So, JB, you quakin'? Losin' some sleep?

Or did that nail miss you entirely?

Movin' on ... business as usual

WHOA! The NC law is aimed specifically at businesses that misrepresent their geographic location.

Anyone that has seen bloomzie's site will know that it does nothing of the sort. Instead, the site contains multiple -- and prominent -- staements about the company's physical location.

(I have ONLY problem with JB's site, and I have discussed it with him on the phone. Like TFTD800 and all other OGs -- the site INCLUDES delivery in the product prices, and does not say so! Illegal? No. Deceptive? Yes. I can't help but wonder what might happen to his sales if this error was corrected.)

But, to mix metaphors, we have bigger fish to fry than taking shots at JB's site. The REAL problems are associated with the TFTD800 group AND their (even worse) "business partners" that are using targeted, and deceptive, advertising to SUCK local orders away from REAL FLORISTS and then feed them back to us at discounted prices.

All the best,

Bill

 

[sharonbrannigan]

So, JB, you quakin'? Losin' some sleep?

that explains a lot. much appreciated.

 

[theRKF]

Sorry if my point wasn't clear ... For something that is supposed to be "another nail in the OG coffin" I don't think our resident OGs (JB and others) are sweating this at all.

BTW, NC seems to have some funny ideas about internet commerce - so much so that they are changing their tax laws to the point that most internet affiliates in NC will be out of business in no time (note how Amazon has already shut down their NC affiliate program; I don't remember if CJ has yet, but they will).

Ryan

 

[kt4ye]

Ryan... Maybe my post should have been labeled "DOG Coffin."

Re NC tax laws, the last I heard, Amazon and Overstock -- among others -- are *threatening* to shut down IF the pending legislation passes. The CEO of Overstock was on talk radio last week. He gave the "sob story" of all the poor NC affiliates that will go out of business.

It was odd (?!) that he did not mention the existing North Carolina B & M stores that ARE going out of business because of the TAX FREE status of their out of state competitors. And he did not discuss the fact that 100% of the revenue to these competitors GOES OUT OF STATE and STAYS OUT OF STATE. (Sorry for "shouting.") And that with the lost sales NC loses lots of jobs.

All the best...

Bill

 

[RWK]

The reason I asked about the penalties for the publishers, we have a similar law here, however, the way it was wrote frees the publishers from any involvement. So, regardless of fines levid against the advertiser......the directories can go right on and publish the ads anyway.

 

[theRKF]

Re NC tax laws, the last I heard, Amazon and Overstock -- among others -- are *threatening* to shut down IF the pending legislation passes. The CEO of Overstock was on talk radio last week. He gave the "sob story" of all the poor NC affiliates that will go out of business.

Amazon already acted over a week ago.

We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 26, 2009. This is a direct result of the unconstitutional tax collection scheme expected to be passed any day now by the North Carolina state legislature (the General Assembly) and signed by the governor. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 26. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date.

Other lesser-knowns have acted to will act in a similar fashion. Affiliate marketing is multi-billion dollar industry. Seems kinda silly for one state to penalize a newly established and rapidly growing business model. That's a LOT of income tax they just flushed down the toilet.

Ryan

 

[CHR]

Other lesser-knowns have acted to will act in a similar fashion. Affiliate marketing is multi-billion dollar industry. Seems kinda silly for one state to penalize a newly established and rapidly growing business model. That's a LOT of income tax they just flushed down the toilet.

Most respectfully, there's a LOT of local income tax, employer taxes, property tax and sales tax flushed down the toilet the last several years as a result of loss of sales to fictitious florists. Several billion nationally by my calculations.

The rapid growth is in large part due to reduced overhead from not having to maintain any B&M presence. All the benefit of state infrastructure without having to contribute to it.

NCs law only deals with phony locals. If consumers choose honest broker agents, everybody's on the up & up and no one should gripe. The 2 million orders or so (my estimate) now flowing through dOGs posing as locals will go a little way in helping both local florists and consumers - who will get more for their dollars.

 

[RWK]

Regarding the SC law - I was told about the wording at the last florist meeting I attended. With me being a freelancer and no shop affliation.....I'm not sure where, when, and how to approach my local congressmen to try and get the law strengthened.

 

[bloomz]

Sorry if my point wasn't clear ... For something that is supposed to be "another nail in the OG coffin" I don't think our resident OGs (JB and others) are sweating this at all.

Ryan

It takes a lot of nails to close a coffin and they never found enough for the King of Decepetive marketing in 15 years.

He finally self destructed like all greedy dishonest bastards finally do. A bit like the Macon Ga dude no one's heard of in a long time.

Wish it didn't take so darn long but since it does I take announcements like this as a - good luck and all the best back atcha.

 

[Dazeal]

You mean '...dOG's Coffin' Bill.

Huge difference.

 

[BOSS]

Seems to me, that Amazon and others could remain as they are by simply charging, collecting and submitting state sales tax.... no??

 

[kt4ye]

Seems to me, that Amazon and others could remain as they are by simply charging, collecting and submitting state sales tax.... no??

The reason why they don't do what you suggest has nothing to do with the "reason" that they give: They say that it is a logistical impossibility to keep track of the many different sales tax rates around the US. (I have been told that there are many software packages -- some free -- that do this. This is an integral part of my own copy of Quickbooks Pro.)

The REAL reason is that THEY WILL LOSE BUSINESS!

"TAX FREE" -- even if they do not advertise it -- is a POWERFUL incentive.

A few years ago, our neighbor to the South, the Palmetto State of South Carolina -- came up with the idea for a TAX FREE BACK TO SCHOOL WEEKEND.

That first weekend, the freeway leading across the State Line from Charlotte became GRIDLOCKED!

Local merchants complained bitterly to the NC Legislature. A couple of years later, they adopted a NC TAX FREE BACK TO SCHOOL WEEKEND. It has become the key date in the NC retailers otherwise-dreary Summer Sales Season.

If people can buy something TAX FREE, I believe they will do so even if the item that they bought costs more than if they bought it locally, tax-included.

All the best,

Bill