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Banking Business culture Competition Legal Management Regulation Restaurants Retail service Small Business Strategy

FACTA: Red Flags and Milk Bones

Restless Nights
Creative Commons License photo credit: il Quoquo

Despite the fact that Blondie (our golden retriever/ husky mix) gets credit card applications in the mail, identity theft is really not something that keeps her awake.

For that matter, little does.

When we go to Wells Fargo together, they never ask for her ID.

Maybe the sad Golden Retriever eyes are what the ladies at the drive-up can’t resist. All I know for sure is that on the way home, the old girl (Blondie, that is) filets out in the backseat in Milk Bone heaven.

For us bipeds, life is a bit more demanding. We’re asked for IDs frequently, yet sometimes we aren’t asked even though we’re supposed to be.

Why, whatever do you mean?

The last time I read an American Express merchant agreement, it said something about verifying the cardholder’s identity by checking their driver’s license or similar government-issued ID.

For whatever reason, I can count on one hand the number of times that happened since 1983.

I kind of understand the thought process here. Businesses likely see that as an opportunity to offend their clientele and customers might be annoyed. Still, that’s simple enough to defuse by saying something like “I apologize Ma’am, we just want to be sure that someone else isn’t using your card”. But it doesn’t happen.

Meanwhile, identify theft increases and as you would expect, lawmakers in Washington, in the state house and eventually, in the financial industry respond with ways to combat the problem.

For example, the credit card industry has PA-DSS (and a few things they worked up prior to that).

That’s a FACTA

For everything else, there’s Mastercard. Er, I mean FACTA – the Fair and Accurate Credit Transactions Act of 2003.

You may hear it referred to as “The FTC Red Flags Rule” or just “Red Flags”.

For banks, it’s old news. They’ve been dealing with it since 2003.

Just yesterday, one of my banks called and asked me to drop in sometime so they could scan my new driver’s license (it was new last October). The scan they have shows an expired date. Apparently regs require that the ID they have on file is current. At least they are paying attention (good news).

My presumption is that a scan of your ID allows the bank to compare the scan vs. the one that tall, good-looking guy gave to the teller before attempting to empty your savings account. I don’t know if they actually do that or not.

Are you a financial institution?

You’re probably wondering how all of this impacts the small business owner. For starters, it might just make you into a financial institution.

FACTA applies to any business that provides goods and services to consumers and bills them later (mostly).

Implementation for small businesses keeps getting delayed, for what are probably obvious reasons, but they say they’re serious that the November 1, 2009 deadline is the real deal.

Definitions are funny things. Like standards, they are subject to interpretation. I don’t look upon myself as a financial institution or a creditor, but someone else just might and the same goes for you.

Here’s a quote from the FTC.gov Red Flag Rule page:

The Rule applies to ‘financial institutions’ and ‘creditors.’ It’s important to look closely at how the Rule defines those terms because (emphasis mine) they apply to groups that might not typically use those words to describe themselves.

(snip)

Under the Rule, the definition of ‘creditor’ is broad, and includes businesses or organizations that regularly provide goods or services first and allow customers to pay later.

Examples of groups that may fall within this definition are utilities, health care providers, lawyers, accountants, and other professionals, and telecommunications companies.

The definition also covers businesses or organizations that regularly grant loans, arrange for loans or the extension of credit, or make credit decisions.

Examples include finance companies, mortgage brokers, and automobile dealers or retailers that offer financing or collect or process credit applications for third party lenders. In addition, the definition includes anyone who regularly participates in the decision to extend, renew, or continue credit, including setting the terms of credit.

Because of this, I cant suggest strongly enough that you read the FTC Red Flag Rule documents (link at end of post).

Here’s another one from the Red Flags FAQ – it’s the one that gets me:

The Red Flags Rule applies to businesses that regularly defer payment until after services have been performed.

I don’t defer all of it, and I don’t do it for all clients, but it doesn’t matter because I do it in some cases for some amounts.

I wonder how many businesses that accounts for?

No Quarter for Cities & Community Orgs

Community benefit organizations (also known by the misnomer of “non-profits”) are also subject the Red Flags Rule if their business processes and billing situations fit the profile.

Even the city where you live is considered a creditor by this Red Flags Rule if they (for example) bill you after the fact for the amount of water and sewer your house or business used last month.

If they charged a flat fee for water/sewer, even if it is after you’ve used it, the city wouldn’t be a FACTA creditor. Ahhhh, those little details.

Credit cards and retainers

Thankfully, it doesn’t appear to apply to businesses who take a credit card number and charge it monthly until your balance is paid off (PA-DSS deals with that – we need to talk about that little gem as well).

Likewise, FACTA doesn’t impact businesses who collect a retainer and then credit future services against that retainer. You knew they’d exempt attorneys *somehow*, right?

While this all of this isn’t the end of the world, it will require some process refinement and it might even change how you bill your clients.

You can learn more at http://www.ftc.gov/redflagsrule

Categories
Amazon Business culture Community Consumer Advocacy Customer relationships Employees Ethics Legal Management Politics Public Relations Regulation Retail Small Business Social Media Twitter

#amazonfail, Niemoller and your business

choc bunny
Creative Commons License photo credit: Asti21

First they came for the chocolate bunnies, and I did nothing because I am not a chocolate bunny.

Quite a weekend we’re having: Passover, Good Friday, Easter, the Masters and a few thousand Easter Egg hunts, to name a few.

Oh, and I smoked a pork roast that turned out totally incredible. But I digress:)

In the midst of all the holiday celebrations, worship, family time and so on, Amazon gets into the act. So much so that they are trending #1 on Twitter (you must be logged into Twitter in another browser window/tab BEFORE clicking this link, sorry but that’s just how Twitter search works).

The hashtag (ie: search term) on Twitter that is receiving all the attention is #amazonfail.

First they came for those with an Amazon rank

It’s been a while since the online bookseller stepped in it and alienated a huge number of people, but they got into the act again this weekend.

Last time it was about Amazon shafting authors who use print on demand services that weren’t owned by Amazon.

This time, it’s some or all of the “adult” community.

At first, it wasn’t clear exactly what was going on (and still may not be), but an official customer service response from Amazon indicates that they are removing sales rank data for content with adult ratings. Amazon now denies this, calling it a glitch.

A growing number of folks in the GLBT (or LGBT) community (particularly on Twitter) are noting some inconsistency of the removed ranking data, noting that it seems to apply more to content of interest to them than to adult material across the board.

No matter what your feelings about the various forms of sexuality, I should remind you about two things:

  • First, the Rev. Martin Niemoller poem, “First they came“. If your business (through you) is willing to take on a group, be careful what you wish for. Be sure of your staying power with your stance on an issue.
  • Second, while there are political and other sensitive issues here, this isn’t why I bring this up. There are business issues intertwined throughout this.

In Amazon’s case on this issue, they risk a nationwide boycott from the LGBT community. If they change their mind, they risk a boycott by other groups. If they waffle and end up somewhere in the middle, they might get both.

Yeah but this stuff has nothing to do with my business!

Not really.

It’s 2009. For no cost, anyone can get detailed info about your political contribution numbers and plot them on a Google map and do any number of things with it, including to suggest that people pay you a visit.

Are you ready for that?

If you think your personal values don’t affect your business, think again.

Every business owner will inevitably find themselves taking a side on a political, theological or similar issue at some point (probably several dozen). You need to think through how you will handle situations like this.

  • Will you bring your stance on contentious issues into your business?
  • If you become active on an issue, will it impact your business and if so, are you strong enough to stand firm when the public attaches the issue to your business? It doesn’t matter what the issue is. What matters is how you will handle it and how your staff will handle it.
  • Are you willing to deal with the fact that your staff feels differently about the issue (whatever it is) than you do? Whether you are or not, you should talk to a HR specialist or an attorney who specializes in employment law before hiring people. HR problems are a great way to lose your shorts.
  • Is your stance on an issue going to affect the clients and employees you attract? As long as you are sure of yourself, that’s the primary concern. Well, that and are you acting within the law?
  • Will your ethics on the issue in question suggest that your business ethics should be called into question?

I’m not asking nor suggesting that you temper your views or how and where you share them with others. Only you can make that decision.

Nor am I suggesting that you be hypocritical. Congruent for sure, but not hypocritical.

What I am suggesting is that you need to decide in advance if you are willing to lose your business (or a part of your business) over your stance on an issue. It’s ok either way,  just be sure of yourself before you go down that road.

Some might suggest that you’ll get more business if you show your colors. In some cases, I think that’s absolutely right. One of the easiest examples I can think of where this likely helps a business is Ian’s stance on China, human rights and his Catholic goods store.

More than anything, I am suggesting that you consider the big picture before you step onto the soapbox.

No matter how you feel, it is difficult to get the genie back into the bottle.

PS: It’s all about the malted milk eggs for me.

UPDATE: An interesting theory on what might be happening to Amazon: http://tehdely.livejournal.com/88823.html

Whether this theory is true or not, it’s a valuable lesson for system designers of social media systems, interactive/community feedback systems and the like.

Meanwhile, a bunch of tweets reference people actively tagging conservative books with keywords that might get them de-listed from the sales rank numbers for the same reason that others are being de-listed.

UPDATE: Amazon says the change in sales rankings is a glitch. In social media circles, they arent getting a lot of traction on that. Time will tell.

Categories
Blogging Consumer Advocacy CPSIA Politics Regulation

Watering down your message

Apocalyptic Elegance
Creative Commons License photo credit: NyYankee

While grumbling to myself about the effectiveness of the “Making CPSIA testing economics reasonable for small business” population (my name for a number of “us”, not a name this non-group group has adopted), I continue to be disappointed in the actions being taken by Congress to repair the Act.

With that, I think it’s a good time to announce that the political posts here will cease.

I’ve created another blog that is designed specifically to address political and regulatory issues faced by small business.

Why?

I simply don’t want to dilute the message that Business is Personal has stuck to for the last 4 years (yeah, I forgot to mention we had a birthday – what the heck am I thinking?) and frankly, I’ve done exactly that over the last several months.

While it has been a positive for the blog’s traffic, it isn’t the reason why BIP exists. I thought briefly that maybe it should be, as it resonated with a lot of folks (blog traffic has tripled since I started talking about CPSIA).

Despite that, I’m taking that message elsewhere. It’s off topic, mostly.

When I have that “elsewhere” ready to unveil, I’ll let you know. It won’t be too long.

Categories
China Competition Consumer Advocacy Corporate America CPSIA Education Homemade products Leadership Legal Management Politics Public Relations Regulation Restaurants Retail Small Business Social Media Strategy Wal-Mart

The force is strong with this Congress

For decades, I have avoided getting involved in politics mostly because it has a way of seriously annoying me.

As I hope you’ve noticed, I’ve also avoided getting politic-y here at Business is Personal – maybe with the exception of discussions regarding the CPSIA.

Despite my best efforts, Congress is working overtime to pull me into their world.

And then this morning, I’m talking to a prospect who asks “Do you get involved in politics much?” Hooboy:)

Never fear, however. BIP is not here to be political. I will avoid it at every possible occasion.

Regulation is necessary

Regulation is necessary and anarchy is a pretty bad alternative. The problem is that Congress seems to be working overtime to destroy small businesses, intentional or otherwise.

Those that deserve it, so be it. Most do not, IMO.

It seems fairly obvious that we can legislate the loss of jobs a whole lot easier and faster than we can create them via legislation.

Almost 30 years ago, the Regulatory Flexibility Act (RFA) was put in place to protect small business from a “substantial impact” from new rules put in place by agencies as a result of new Federal laws.

The name sounds all nice and cuddly, doesn’t it? “Regulatory Flexibility Act” Awwww:)

The law requires an analysis of any new agency rule to make sure that it wont significantly harm a substantial number of small businesses. Agency rules implement the enforcement of legislation passed by Congress and signed into law by the President.

Problem: New rules can avoid the analysis if the enforcing agency’s head “certifies” (by publishing a statement in the Federal Register) that rule won’t adversely affect small businesses.

For example, the CPSC (Consumer Product Safety Commission) recently entered official comments into the Federal Register regarding several important CPSIA issues.

One of the things in that Federal Register entry is the RFA certification statement that says the CPSIA “doesn’t impact small business”. In that link, see page 10479, section G where they make all things right with the small business world by simply saying small businesses (even those “evil mommybloggers” who own businesses<g>) won’t be affected.

My Kingdom for Safe, Modern Food!

A new challenge for some small businesses might be HR875, which has an easy-to-like name: the “Food Safety Modernization Act“.

Not even Mr. Peanut would try to convince you that we don’t have food safety work to do.

Like the CPSIA, this law appears to target large food processing facilities, corporate farms, imported foods and so on. After all, you don’t hear about thousands being poisoned from foods purchased at the local farmer’s market.

Just like the CPSIA doesn’t differentiate between moms who sew outfits for my granddaughter and big Chinese factories that import a few thousand container loads of mass-market clothes per year, the FSMA (HR875) doesn’t differentiate between Tyson, Conagra and the guy who owns 9 chickens so he can sell eggs once a week at the local farmer’s market.

Not even the USDA-certified organic farmer escapes the FSMA’s reach.

All your chickens are belong to us

No, that is not a typo.

Finally, there is the new animal radio ID labeling regulation currently National Animal Identification System that is winding through Congressional committees.

Yes, I regularly remind you to measure everything, so I can see the good coming from this.

Except…

The problem with the NAIS, as with the CPSIA and the FSMA, is in the cost of implementation when you compare a large corporate farm to someone who organically (or not) maintains even one head of livestock or 9 chickens.

The point of all of this? You need your trade association. If you don’t have one, start one. If yours stinks, get involved and make it better.

No, it won’t be easy, though fixing an org is easier than starting one.

Working as a Wal-Mart greeter is easy. Pushing the Staples Easy button is easy. If you wanted easy, you wouldn’t have started / bought a business.

These laws can just as easily impact your employer as they can you as a self-employed person, so you’re going to be subject to some of them one way or another.

Get involved.

Categories
China Consumer Advocacy CPSIA Homemade products Leadership Media Regulation Small Business Web 2.0

The CPSIA, Glenn Beck, the Chicken and the Egg

Am I the last so-called journalist in this country? (stupid question, I’m not even one of those<g>)

You may or may not know I write a business *opinion* column once a week in the Beacon – and that isn’t even my “real job”.

What am I talking about? Yes, the CPSIA again.

Rob over at CPSIA Central emailed today and said that Glenn Beck wasn’t covering the CPSIA because Glenn or someone on the show staff says “there’s no public outcry”.

Really? Is that the minimum daily requirement to get a journalist to write a story? I must’ve missed something.

Per Rob’s request, I wrote a letter to the Glenn Beck Show in hopes that they would realize that THEY (the press) are quite often the catalyst to creating that public outcry.

Here’s my letter to Mr. Beck:

Mr. Beck,

My understanding is that you feel there is no reason to cover the CPSIA story on the Glenn Beck Show because “there is no public outcry”.

I suppose that Watergate wasn’t worth covering for that reason, and nor was Iran-Contra or the Lewinsky story, et al. Part of what causes a public outcry is that journalists learn about stories that the public SHOULD learn about and/or SHOULD be upset about – and proceed to educate them via their media.

Isn’t that part of your job?

Honestly, it might be that you just aren’t listening in the right places. You’re a busy guy. You can’t possibly be everywhere and hear about every little story that affects tens of thousands of businesses across the US.

In addition, I suspect a lot of the lack of attention stems from the idea that this really only hurts “mommy businesses” – and the perception is that these “mommy businesses” really don’t do much but keep moms out of the mall and give them a little something to do when baby is taking a nap.

Because those perceptions are so dead wrong, I ask that you do three things:

First: Read https://www.rescuemarketing.com/blog/2009/01/13/strategic-cpsia-awareness/

Notice that this ISNT just about “mommy businesses”, but it reaches out to a substantial piece of the business community.

Second: Google CPSIA and see what you find: 985,000 search results. No outcry indeed.

Third: If you’re really interested in learning more about the CPSIA, read https://www.rescuemarketing.com/blog/category/cpsia/, http://www.thesmartmama.com/bg
http://www.fashion-incubator.com just to get started.

Thanks for listening,

Mark Riffey

Rescue Marketing

406-249-0307

By the way, if you feel like joining the fray, Mr Beck’s email address is me at glennbeck dot com.

Categories
China Competition Consumer Advocacy CPSIA Homemade products Leadership Manufacturing Politics Regulation Retail Small Business

DeMint gives CPSIA instructions to small business owners

Look what happens when you step away from the CPSIA bonfire for a couple of days to get some work done…after all, *someone* has to bail out the country, may as well be me.

Senator DeMint from South Carolina is working on some legislative fixes to the CPSIA, but more importantly, in his blog he describes the steps you must take to get support for his changes. 

His common sense proposal to change the CPSIA is also covered in that same blog post. Clarity – a little shocking.

Once again, I’m asking you to call your senator’s WASHINGTON office (not the local, in-state one) as DeMint instructs.

Categories
China Competition CPSIA Manufacturing Politics Regulation Retail Small Business

CPSIA thoughts from a manufacturer/retailer: Cut that line

Don't wanna leave!
Creative Commons License photo credit: kyz

This morning I received a private comment from a reader. He gave me permission to repost it here.

Hello Mark

In Europe they have a “no lead policy” based on roHS (Lead Free). All the US components I buy are roHS compliant so that they may be sold in Europe.

I can also sell in Europe by simply documenting my purchases. I can not afford to sell in to the children’s market any longer in the USA as testing costs would exceed the Gross revenue of our children’s products. As of Feb 10th we will no longer make little backpacks for kids.

This is like a dream come true for China and Walmart. In about six months all the kids will be wearing green clothes with little red stars. The toys will have the same color scheme of course the selection might be a bit mundane.

Dave Sisson CEO
Jandd Mountaineering Inc

Hopefully, the pressure that all of you are putting on your Congressional reps and Senators is helping behind the scenes. Likewise, our calls to the CPSC. This situation is sickening and the timing simply couldn’t be worse.

Categories
CPSIA Homemade products Politics Regulation Retail Small Business

Energy and Commerce letter to Waxman/Rush re: CPSIA

Read for yourself…. http://republicans.energycommerce.house.gov/Media/File/News/1.21.09_CPSIA_Letter_to_Henry_%20Waxman.pdf

Not sure if anything will come of it, nor if it is a partisan smokescreen to simply say “We said to hold up, but you didn’t.”

Time will tell. If the letter is on the up and up and everyone’s intentions are honorable (yeah, I know<g>), then it might be good news.

Categories
CPSIA Management Regulation Retail Small Business

Denial – Not a river in Egypt, an attitude about the CPSIA

Ian over at Aquinas and More Catholic Goods sent me some reaction he’s gotten from his wholesale sources regarding CPSIA.

As you might expect, they’re all over the board.

We have found that several of our vendors are in denial about the law and have flat out said they won’t get things tested because they already know that their components are safe. They have said they will send us a letter saying that everything is safe but aren’t actually going to get things tested.

Several have said that there is no way this can be enforced so they aren’t going to bother getting certified because everything is made here in the US.

Several others have said that testing will bankrupt them.

Retailers, what are you hearing from your wholesale vendors? Or have you bothered to ask?

Categories
China CPSIA Homemade products Manufacturing Politics Regulation Small Business

Smoke, mirrors or an honest effort to fix the CPSIA?


Creative Commons License photo credit: L. Lew

Last week after I left for a winter camping trip with the Scouts, a letter to CPSC Chair Nord came flying out of the House from Waxman, Rush, Pryor and Rockefeller. I just got to the letter this evening, and it’s worthy of comment. 

You can read the Waxman-Rush letter to Chair Nord here.

Many of the proposals in the letter sound like they are listening, such as their suggestion that the commission approves component testing and that the CPSC’s commissioners get off their duffs and make some firm policy decisions. Having the general counsel issue non-binding statements with words like “may” when it comes to certain types of testing isn’t helping anyone comply with the law.

No one really wants exemptions and component testing is a good happy medium for many smaller vendors, but there are plenty of other decisions to be made, both by the CPSC and by Congress. Once Tuesday’s lovefest ends, it’ll be time to get down to real business – like fixing this law or temporarily rescinding it until it can be fixed so that it provides the safety needed without crushing small business. 

As Kathleen Fasanella suggests, “small business”  is in the eye of the beholder. That 500 employee small business designation by the Small Business Administration has long been a joke.

What I wouldn’t suggest is that this letter is an all-clear after the tornado. The pressure on Congress and the CPSC must remain if they are to take action that is of use to kids’ safety AND to small business.