Brian Kinsella
Senior Regional Fraud Manager, Elavon
Be aware of trade laws and common legal pitfalls to help you avoid inadvertently landing your ecommerce business with a large fine.
Starting an ecommerce business offers a multitude of opportunities, attracting potential customers not just locally but from anywhere across the globe. However, many online businesses find themselves in legal trouble, simply from a lack of understanding about trading laws.
Risk of non-compliance fines
Brian Kinsella, Elavon Senior Regional Fraud Manager, warns there can be unexpected risks. “Not only could you unwittingly fall foul of the authorities, but card brands such as Visa and Mastercard impose significant fines if you don’t remain compliant.
“Most of our customers don’t have any problems but, every so often, we hear about issues cropping up, which can prove costly. Here are the top problems we see, along with tips to avoid the same pitfalls.”
Local and cross-border legal compliance
Products approved for sale at home may carry a different legal status elsewhere. For example, selling something as innocuous as medical gloves into the USA may land you in hot water if it is not approved by the US Food and Drug Administration (FDA).
Likewise, face creams available without prescription here may be prescription-only in another country. It is important you know the legal status of your products for the countries you intend to sell into.
It is your responsibility to make
sure what you’re selling is compliant,
to avoid fines and/or legal action.
Knowing your product
In the USA, the FDA maintains a list of ‘nutraceuticals’ — products advertised as herbal but found to contain active ingredients that require a prescription. Similarly, health supplements are constantly reviewed, and countries will have different views on the legality of ingredients. It is your responsibility to make sure what you’re selling is compliant, to avoid fines and/or legal action.
Intellectual property
Intellectual property (IP) infringement is another area businesses can unwittingly find themselves caught up in. Whether it is the sale of clothing replicas or gadgets to watch premium television channels, making sure you have the right to sell your products will ensure you avoid any challenge from card brands.
