Federal Trade Commission Chairman Andrew Ferguson has warned that wedding planning site The Knot Worldwide could be violating federal law as it faces allegations of defrauding small business owners, The Post has learned.
Ferguson sent a letter on Feb. 18 to Sen. Chuck Grassley (R-Iowa), who cited The Post’s exclusive reporting on alleged wrongdoing at The Knot while urging the FTC to investigate the firm last October over claims that it was swindling mom-and-pop vendors like DJs and dressmakers.
At the time, Grassley said his office has received nearly 200 separate complaints from wedding vendors around the country who had accused The Knot of providing fake or spam customer leads, locking them into ad deals that were difficult to cancel or failed to provide the promised benefits and other shady practices.
“As you know, the conduct you describe can potentially violate laws the FTC enforces, including Section 5 of the FTC Act, which prohibits deceptive or unfair business practices,” Ferguson wrote in his letter to Grassley, which was exclusively obtained by The Post.
Ferguson added that while he was unable to “disclose the existence or details of any non-public investigations, I can continue to assure you that protecting small businesses from deceptive practices remains a priority for the Commission.”
An FTC spokesman declined to comment. The Knot Worldwide did not respond to multiple requests for comment.
Ferguson pointed out that the FTC has recently taken action against companies accused of similar misdeeds.
Last September, the FTC secured a $2.5 billion judgment against Amazon as part of a settlement that required the ecommerce giant “to clearly and conspicuously disclose cancellation procedures” related to its Prime subscription service.
“The commission remains committed to protecting consumers, including small businesses, from deceptive practices by holding violators accountable,” Ferguson wrote.
In a statement, Grassley said the “hundreds of whistleblower disclosures I’ve received about The Knot’s troubling business practices, including from constituents in Iowa, demonstrate that this is a nationwide problem, not a series of isolated incidents.”
“America’s hardworking small business owners deserve fairness and honesty. I appreciate the FTC’s responsiveness to my oversight, and I’m urging the commission to conduct a thorough investigation into allegations of fraud and related misconduct at The Knot,” the Iowa senator added.
Grassley, who chairs the prestigious Senate Judiciary Committee, previously told the FTC that his office had received a whistleblower complaint from a small business owner who said they had called up The Knot’s customer service team to “discuss why her business continued to be advertised in the wrong section of the website and hadn’t received substantive leads.”
The customer service rep allegedly “turned off the call recorder and told her that she should create fake accounts and leave her own business fake reviews to boost the credibility of her profile which would in turn help her receive a higher number of legitimate leads,” according to Grassley’s letter to the FTC on Oct. 22 of last year.
The Knot has strenuously denied wrongdoing and insisted it is working hard to mend relations with small businesses.
In response to Grassley’s letter last fall, a spokesperson for The Knot Worldwide said the company “does not engage in fraudulent or deceptive business practices.”
“We are laser-focused on innovating to help wedding professionals grow their businesses with quality leads and support millions of couples annually on their planning journey,” the spokesperson said at the time. “We remain deeply focused on continually enhancing our products, support, and safety standards so every experience reflects the values that built our brand.”
As The Post has reported, small business owners and wedding industry insiders say they have little choice but to advertise with the The Knot Worldwide – which consists of brands The Knot, WeddingWire, WeddingPro and Hitched, among other sites – because it controls a major chunk of the wedding planning marketplace.
