FTC Guidelines and Clickbank Affiliates

[Dennis Becker]

There's been a lot of talk about the FTC guidelines and testimonials. It's my understanding that an infoproduct publisher is equally liable if one of his or her affiliates is brought under scrutiny for claims made in a presell message, such as a blog post.

So in other words, if you're selling a make money book, and modify your sales page to be in compliance, and there are affiliates out there, anywhere, singing your praises about how they made a bazillion dollars by following your system, they and you both could be fined.

Now, it's easy to say that you need to have some control and agreement and communication with your affiliates, but in the case of Clickbank products, that's not possible, is it? There's no way of knowing who's promoting your product.

But what about the fact that Clickbank is actually a reseller, and the customer actually is purchasing from Clickbank. Does that change things?

Sure, Clickbank can go back and do a review of all sales pages and make sure they come into compliance, or remove them from sale, but there's another problem. Many affiliates are bypassing the publisher's sales page, and linking straight to the CB order form, from their own version of a sales page.

So if I have a product, and there are some problem testimonials, which I fix before December 1st, but an unknown affiliate is using his version of the page with bad testimonials, am I going to be called into question?

I have a major issue with that, actually. A year or so a well known marketer had a membership site where he supplied rewritten sales pages of CB products, supposedly they would convert better. My product was one of the ones he rewrote, and he distributed it to all his members at the time. He didn't ask my permission to rewrite my sales page, he didn't need to get Clickbank approval (like I did when I submitted it), and I wasn't aware of it until I saw extra traffic coming from sales pages that weren't mine, but I was still getting credit for the sale (I only saw the traffic because I had statcounter code in my original page and he didn't bother to remove the javascript).

The rewritten sales pages still had my name and signature on them, even though I didn't write them. Am I screwed if the FTC comes calling about a sales page I didn't write, that has my name on it?

Bottom line is, if Clickbank is deemed to be the seller of all the infoproducts in its inventory, and liable for the testimonials and claims on all those sales pages, it could get pretty messy indeed.

[Jill Carpenter]

Yes, I agree with you.

The digital world we live in today is a strange one indeed. And it is next to impossible to control any of it at this point.

I dealt with a situation where I was allowed to take anything I wanted off of a site (was given permission by the owner) only to later discover that I was dealing with a massive amount of deception and fraud.

Now for the most part, I had obtained my own testimonials from other people using the product which I knew to be true - but other claims I had on my site were the reproduction of claims made by the owner which by the way were false.

In further investigation, other affiliates had used pieces of the site as well to promote the product. The same false claims.

Here is what was highly disturbing - when I personally contacted these affiliates they did not care - some were in other countries, some still had first page results, some had articles ALL OVER the web.

Now, when you start submitting this stuff to massive amounts of article directories, you also open your articles to being printed on lots and lots of blogs.

The attempt to clean up such a mess is next to impossible. Many affiliates don't really keep track of what was submitted, where and when.

There is a HUGE amount of deception going on on the web. I know because I have personally witnessed it.

I think in order for clickbank to get around this they may need to re-invent themselves completely.

If they are wise, they may want to start some heavy emails to affiliates warning them of some changes to come. Those who don't comply can get fined or removed as sellers.

Who knows if they will do this - but this could be one solution.

And clickbank is not alone! Hey, I promoted another product where I was mislead - not in that the product itself did not perform, but the product was based on a fictional character. I was led to believe this was a real person.

So, now we are also dealing with stock photos, pen names, etc....

Where is the line drawn? Do we protect the consumer or the product creator?

If I am too ugly to show my mug - but I make a great product, should I be forced to reveal my real identity?

Things are about to get a lot more messy.

[Alexa Smith]

Originally Posted by Dennis Becker

So in other words, if you're selling a make money book, and modify your sales page to be in compliance, and there are affiliates out there, anywhere, singing your praises about how they made a bazillion dollars by following your system, they and you both could be fined.

I accept most of the points both of you have made above, but in reality, I think it's almost inconceivable that these new FTC guidelines are going to be followed up in such a way as to produce that result. To hold a Clickbank vendor personally liable for a representation which he has no possible way of knowing about is clearly not the FTC's intention. And I would think it's extremely unlikely that that would ever be their future intention, either.

Originally Posted by Dennis Becker

Bottom line is, if Clickbank is deemed to be the seller of all the infoproducts in its inventory, and liable for the testimonials and claims on all those sales pages, it could get pretty messy indeed.

This seems very much less unreasonable, to me. Clickbank, by its own statements on its own web site, is clearly acting as a retailer, and is clearly approving the sales pages of what it sells before selling anything. But to try to extend Clickbank's own liability (whether criminal or civil) to affiliates' pre-selling pages, interpreting statements made therein as representations forming part of the contract of sale, would seem to me to be complete nonsense.

[Dennis Becker]

To hold a Clickbank vendor personally liable for a representation which he has no possible way of knowing about is clearly not the FTC's intention.

In a perfect world, you'd be right.

But since in many cases of this nature, innocent until proven guilty is turned on its tail, and the bottom line includes the fact that the vendor is benefiting from the affiliate's misrepresentation.

I think in order for clickbank to get around this they may need to re-invent themselves completely.

I think you're right. They may ignore the potential risk, and hope they can do "business as usual", but that's a very big risk indeed.

[SolomonHuey]

Originally Posted by Alexa Smith

To hold a Clickbank vendor personally liable for a representation which he has no possible way of knowing about is clearly not the FTC's intention.

Originally Posted by Dennis Becker

In a perfect world, you'd be right.

But since in many cases of this nature, innocent until proven guilty is turned on its tail, and the bottom line includes the fact that the vendor is benefiting from the affiliate's misrepresentation.

I think you're right. They may ignore the potential risk, and hope they can do "business as usual", but that's a very big risk indeed.

Yup, intention and what may actually happen are two entirely different things.

Can you risk your entire business based on the hope they will rule in your favor?

And if they do decide to investigate, there's no telling what type of costs and time would be needed just to prove you shouldn't be held liable.

Solomon Huey

[Star Riley]

Whatever happened to any of this Countries other witch hunts?

New Testimonial:

This Product/Services may not make you any money, So buy at your own risk or just for entertainment value!

The best thing we can do is work 9-5 and look for social security when we retire Fear not Uncle SAM will provide He is good at handling finance and stuff.

D.Bizzle what is a Marketer to do?

[Star Riley]

Did I say Witch Hunts?

I meant helpful attempts to help.

[marciayudkin]

But what about the fact that Clickbank is actually a reseller, and the customer actually is purchasing from Clickbank. Does that change things?

This is a great question, and one that I'll include in my upcoming session with an attorney who will be decoding the FTC regs.

Thanks for asking it here.

Marcia Yudkin

[Dennis Becker]

This is a great question, and one that I'll include in my upcoming session with an attorney who will be decoding the FTC regs.

It would be very helpful if you could post here later what he thinks about the Clickbank thing.

[Catalyst eMarketing]

Joel Comm's attorney weighed in on the FTC issue here.

New FTC Rules for Testimonials and Endorsements in Marketing

So for product owners with affiliate programs he says:

Marketers As a marketer working with affiliates you need to take some steps. First, you need to communicate with all your existing affiliates that you expect them to be in full compliance with the new FTC Rules. They should also be informed that you reserve the right to drop them as an affiliate and/or withhold payment if you feel, at your complete discretion, that they are NOT in compliance with the new rules. These requirements should be spelled out in a new affiliate marketing agreement which includes having the affiliate indemnify you as the marketer if something they do or say results in any FTC or other legal action.


It would also be a good idea for you to have every affiliate complete an application (which someone on your staff actually reviews) letting you know you're dealing with the type of people you want to deal with, because having some vetting process in place may give you a better case to avoid FTC liability if one of your affiliates goes rogue and exposes you to liability. You have to account for the fact that if you end up getting fined by the FTC as the Advertiser because of something an affiliate did on their own, it's probably because the FTC has realized they'll never be able to collect the fine from the affiliate. And, even with the indemnity clause, if they don't have the money, you can't get it. So, do everything you can to show the FTC that you are a conscientious marketer doing everything you can possibly do to stay within the guidelines.

[Kurt]

In my non-expert opinion, ClickBank is a unique example. If you read the agreement with CB you give certain rights to Clickbank, which means Clickbank is the seller, not you.

It seems to me, using CB gives one an added layer of protection over other affiliate programs, or running your own.

[zapseo]

I'd been thinking about that, too, Dennis.

I mean, it seems to me that this is really bad news for Clickbank and their whole business model.

To me, it seems like the new FTC regs would need to reign (rein?) in affiliates -- making "free for all" affiliate programs in real trouble at this point.

Sellers with affiliate programs will need to spend more time vetting the affiliates who are promoting their products, as well as their promotions.

There is some precedent for this! You can't just sell ANYTHING in the CJ marketplace, for instance - some companies require an application process.

In fact, I think it really may be the death of the "free for all" affiliate programs", and you could actually see (which could be interesting, in lieu of some of the FTC's other regulations) it required for people to have to PAY to become an affiliate for a program, because of the vetting required.

edited to add:
Heh. Just read Joel Comm's attorney's opinion.
Strokes my ego -- we say pretty much the same thing (or, maybe he says it a lot better -- but that was pretty much the essence of my thinking...Maybe I should go to law school....naaaaaah.

[zapseo]

Originally Posted by marciayudkin

This is a great question, and one that I'll include in my upcoming session with an attorney who will be decoding the FTC regs.

Thanks for asking it here.

Marcia Yudkin

Ahhhhhh! Marcia!

I can't begin to tell you how much time I spent on your site yesterday.
And -- because I'm low on funds -- I went out to the local online used book sale place and bought just about EVERY ONE of your books. Should arrive before Hallowe'en. I'm excited.
(I could have sworn I had seen Poor Richard's in my price range, but alas, when I got to checkout -- no more.)

(I was little surprised at the absence (ahem) of certain internet marketing forums on your resources list.)

Guys, Marcia is the epitome of ethical selling.

If you want to learn how to write copy, create public releases, etc., without having to shout from the rooftops (and in ways that could bring the ftc down on you) -- Marcia's your woman.

Thanks for being there, Marcia.

[Dennis Becker]

That's the point I was getting at, Kurt, and hoping that the FTC sees it our way also, because we have no control over CB affiliates, in fact CB won't even give us, first of all, the email address of an affiliate that did result in a sale, and second of all they don't even know who's promoting a product.

Judy, I assume when you talk about "free for all" affiliate programs, Clickbank is an example, right? No need to apply to a specific publisher, if you join Clickbank, you can freely promote all CB publishers.

I made this comment over on my forum, and I haven't changed my opinion. If I owned Clickbank, I'd be looking for an exit strategy right now.

[zapseo]

Yah, Dennis, pretty much my thinking. It's got to be a real game changer for CB.

I'm not sure if I'll like the changes they make.

We'll see.

I'm sure CB hasn't been deaf & dumb wrt to these guidelines.
Might even be able to find comments from them in the comment section. Haven't looked, would be interesting to know (but not valuable enough for me to go hunting...)

[George Wright]

So, It really will be important to "watch" what ClikcBank does in the near future. I.E. Nothing, What you said (see quote) or something else. Because, in the end, when it comes to ClickBank, you are not selling your products, they are and the affiliates are not your affiliates they are ClickBank's.

I wonder if the FTC "gets it?"

George Wright

Originally Posted by 5starAffiliatePrograms

Joel Comm's attorney weighed in on the FTC issue here.

New FTC Rules for Testimonials and Endorsements in Marketing

So for product owners with affiliate programs he says:

[Dennis Becker]

I wonder if the FTC "gets it?"

George Wright

Exactly. When was the last time a governmental agency every "got it" the way we want them to?

[blueclcl]

Can someone tell me if this is the law now,or if it is soon to be the law.

[marciayudkin]

Can someone tell me if this is the law now,or if it is soon to be the law.

December 1st the new rules go into effect.

Marcia Yudkin