Washington D.C. E-Commerce Law Violations and Penalties

It is a violation to make false or misleading statements in an advertisement that could influence a consumer's purchasing decision. This includes overstating the benefits, performance, or quality of a product or service, such as marketing a product as "eco-friendly" without substantial proof. The representation does not have to be intentional to be illegal; if it has the potential to mislead a reasonable consumer, it can be considered a deceptive practice under the law. Businesses must therefore be diligent in verifying all claims made in their promotional materials.

Using deceptive methods to induce a consumer to make a purchase or to prevent them from exercising their rights is also illegal. This includes concealing material facts about a product, such as known defects, or using high-pressure sales tactics that rush a consumer's decision. Other prohibited tactics include making it difficult for a consumer to cancel a subscription or return an item by creating confusing or lengthy procedures. Such acts undermine the trust essential for a healthy e-commerce environment and can lead to severe legal repercussions.

The prohibition on unsolicited goods extends to services as well, protecting consumers from unauthorized charges. A business cannot provide a service that the consumer did not explicitly request and then bill them for it. This includes adding unexpected charges to a consumer's account without their consent or automatically enrolling them in a service without clear and conspicuous disclosure. Such practices, often referred to as "negative option billing," are closely scrutinized by regulators and can result in significant penalties.

Businesses are required to provide their legal name, physical address, and accessible contact information, such as a phone number or email address. This transparency ensures that consumers can easily contact the seller with questions or to resolve disputes. Hiding or obscuring this information is considered a deceptive act because it prevents a consumer from seeking recourse and undermines the business's accountability in the marketplace. Providing this information upfront helps build consumer trust and credibility.

Consumers must be provided with clear and conspicuous terms and conditions before a transaction is completed, not after the fact. This includes critical details about the total price, shipping costs, payment methods, return and refund policies, and any recurring fees associated with a subscription. This level of transparency allows consumers to make an informed decision about their purchase and helps prevent future disputes. Ambiguous or hidden terms can be deemed unenforceable and may constitute a violation of consumer protection laws.

Using a consumer's personal information without their explicit and informed consent is a serious offense. This includes sharing or selling consumer data to third parties without permission for marketing or other purposes. Businesses must clearly state in an accessible privacy policy how they will use personal information and obtain affirmative consent before collecting or processing it. Failure to safeguard this data or using it for purposes beyond the consented scope can trigger legal action from both regulators and affected individuals.

Businesses that violate the CPPA can face substantial civil penalties, which serve as a primary deterrent. The D.C. OAG can seek fines of up to $5,000 for each violation, meaning penalties can accumulate quickly in cases involving multiple consumers or transactions. For intentional or willful violations, the fines can be even higher. The OAG can also seek restitution, which requires the business to refund consumers who have been financially harmed by its illegal actions.

In addition to financial penalties, a court can issue an injunction to immediately stop a business from engaging in a specific illegal practice. The court may also order a business to take specific affirmative actions, such as disclosing certain information to consumers or fundamentally changing their business practices to comply with the law. These orders are powerful tools to prevent ongoing harm to the public. Failure to comply with an injunction can result in further penalties and contempt of court charges, adding another layer of legal risk.

Summary of Violations and Penalties