New FTC Rules: Five Reasons to Comply, Wherever You Live

[marciayudkin]

On Thursday, I had a serious, no-hype, 70-minute conversation with my friend and attorney, Jean Sifleet on the new Federal Trade Commission guidelines and their implications for bloggers, affiliates, companies that have affiliates, publishers, webmasters, copywriters and others.

As we talked through the new regulations and what Attorney Sifleet recommended we do about them, five reasons for complying with the rules emerged, and I wanted to share these with fellow Warriors.

1. Stay out of trouble. As some Warriors have claimed, it is indeed most likely that the FTC will pursue egregious violators who have deep pockets. Nevertheless, small players are still vulnerable to legal hassles and fines if they do not comply with the new regulations, and it is just more prudent to comply.

2. Reduce other risks. Compliance with the new rules will help things go better for you if you get called before the FTC or a brother federal agency for another issue.

3. Earn credibility. As awareness of the new guidelines spreads, potential clients and customers see you in a positive light when you’re clearly and conspicuously complying.

4. Avoid second-hand problems. By complying with the rules, you'll be less liable in the eyes of the FTC if a rogue affiliate or reviewer acts wildly on your behalf.

5. Prevent business damage. If you're based outside the US, you might think the FTC has no jurisdiction over you. But if you have customers, affiliates, web hosting, shopping cart services, etc. based in the US, by complying you avoid those aspects of your operation being targeted by the FTC.

Our discussion was both eye-opening and somewhat reassuring to me, and I hope this limited summary of several points we discussed is helpful for those on the board who are concerned and trying to decide whether or not to look into the matter further.

Marcia Yudkin

[EaglePiServ]

Even is you are a small player, another reason to comply is simply to not allow someone the ability to hold the threat of reporting you to the FTC over your head.

Cheers.

[Zach Booker]

It'll be interesting to see what happens.

...but I have a feeling it'll be like Y2K. Everyone stays up waiting for something to happen - then nothing does.

One thing to keep in mind is that, apparently, the FTC will warn you before fining you. There's no need to live in fear of 10,000 being slapped on you all of a sudden.

You'll be told what's wrong and will be able to fix it - or you can just take down the site if you see fit.

With possibly millions of sites breaking the regulations it will be interesting to see who they pick to go after - just remember to disclose everything good or bad on your site.

Zach

P.S - And stay away from Oprah!

[marciayudkin]

another reason to comply is simply to not allow someone the ability to hold the threat of reporting you to the FTC over your head.

Ooh, that's a good one. Consider that added to the list.

Marcia Yudkin

[mdunn123]

Originally Posted by Zach Booker

It'll be interesting to see what happens.

...but I have a feeling it'll be like Y2K. Everyone stays up waiting for something to happen - then nothing does.

One thing to keep in mind is that, apparently, the FTC will warn you before fining you. There's no need to live in fear of 10,000 being slapped on you all of a sudden.

You'll be told what's wrong and will be able to fix it - or you can just take down the site if you see fit.

With possibly millions of sites breaking the regulations it will be interesting to see who they pick to go after - just remember to disclose everything good or bad on your site.

Zach

P.S - And stay away from Oprah!

Thank you! Man I've been waiting for a warrior to just say...."stop freaking out". This whole FTC situation has been blown way out of water...much more than it should be. Did you know that the FTC DOES NOT even have the ability to issue fines? They have to literally take you to court, go through the system and have a court appoint a fine or other issues.

Unless you're doing something big and bad, at most you can expect a letter of the things you need to change or shut down from the FTC and even then you technically don't have to comply and can fight it. They don't have the ability to do what most people think they can do. They're much more like a neighborhood watch team

This is NOT to say that you should do bad things like create a freakin flog, I'm not saying that at all. Just everyone needs to do their research, and calm the hell down.

By the way this is in no way shape or form legal advice

[Sylonious]

Originally Posted by Zach Booker

It'll be interesting to see what happens.

...but I have a feeling it'll be like Y2K. Everyone stays up waiting for something to happen - then nothing does.

That's what I think too.

We've all been focused on our fairly small sites and online businesses. But what about major authority sites like jennycraig.com, medifast1.com, laweightloss.com etc..

With a month to go they have yet to change their online or offline advertising (Remember that they have to change their television commercials as well).

They have a month to go, but if they really had an answer for these new regulations they probably would have made changes sooner instead of holding on until the very last minute.

I strongly doubt that they will make any changes to their websites or Tv ads. If they do they will lose a ton of money. There is no way around it.

So how does the FTC make a distinction that separates weightwatchers.com, their Tv Ads and their affiliates from some acai berry site and it's flogs?

The number of complaints.

Not just 1, 10 or even 100 complaints because weightwatchers will get that many just because of the volume of business that they do.

You'd have to get tens of thousands of complaints to get on the FTCs bad side.

Otherwise the new regulations will negatively effect the major TV network's ad revenue. NBC's ad revenue goes down, GE calls the White House the White House calls The FTC etc. etc..

You guys have us small affiliates worried about disclosure. There is an affiliate on the first page of Google's Organic listing for the keyword "weight loss" (if you know who it is do not post the link) who isn't disclosing.

Weight Loss gets 670,685 searches a month. I'm pretty sure this guy gets at least 100,000 daily visitors. I'm lucky to get 1,000 visitors in one day.

I haven't seen anyone who's really making money (at least ten grand a month) make these changes yet, just newbie affiliates. I haven't seen one website or received one newsletter where anyone discloses their affiliate relationship.

That should tell you something about just how damaging it will be to sales.

[Eric Lorence]

I'm just waiting for them to announce the new "Jack Boot" and "Holster strap" uniforms ...

[Zach Booker]

Originally Posted by mdunn123

This is NOT to say that you should do bad things like create a freakin flog, I'm not saying that at all.

Trust me flog/fnews owners aren't worrying at all either.

You've hit the nail on the head though - people are simply over reacting. Witch maybe was the whole point of the FTC guidelines in the first place?

...it's scared away quite a few people here by the sounds of it.

Avoid these and you'll be fine:

• Using Oprah, Rachel Ray, or any other celeb as an endorsement
• Saying "free" as in free trial. (Unless you disclose properly.)
• Not disclosing your intentions on your site. (Just create a separate page saying your site will make you money and that's the whole point of it - assuming that's the case.)

Of course this isn't legal advice at all...

Here's a great resource: DisclosurePolicy.org: Disclosure Policy, Disclosure Policy Generator

Zach

[Killer Joe]

Originally Posted by Zach Booker

Witch maybe was the whole point of the FTC guidelines in the first place?

As in Witch Hunt I'm assuming?

It would not surprise me if the FTC already has a room full of dossiers on the companies they want to go after. Prior to the new guidelines they may not have had enough teeth to really be effective in the way they wanted to bring those companies down.

Given the finite set of resources available for enforcment regarding the issues they are addressing they will most likely go after the deep pocket offenders first and limit involving small time players to just enough to get the message out.

They will be making examples of some folks, but it may be like hitting the lottery in a negative sense.

However, as more and more folks comply the ones that don't will stand out like a set of wing tips at a bowling alley. We all might as well get used to a new sheriff in town and do our best to adhere to the spirit of the guidelines.

KJ

[mdunn123]

Also,

Let's not forget that FTC only has a handful (in comparison) of people that are working on this, and with a limited budget.

[Zach Booker]

Originally Posted by Killer Joe

As in Witch Hunt I'm assuming?

Whoops! lol

Don't you love typos?

On a serious note I just don't see too many people complying. Mainly because the rules are so vague it'll be impossible too.

I do agree though that they'll simply go after the main offenders - if they can.

Zach

[Sylonious]

Originally Posted by Killer Joe

However, as more and more folks comply the ones that don't will stand out like a set of wing tips at a bowling alley. We all might as well get used to a new sheriff in town and do our best to adhere to the spirit of the guidelines.

KJ

Besides this forum, I haven't seen any affiliate complying. No one who makes a decent income from their site.

[marciayudkin]

Besides this forum, I haven't seen any affiliate complying.

The rules do not go into effect until December 1st.

You can be sure that lawyers are busy drawing up plans now for companies that have the most at stake.

Marcia Yudkin

[Sylonious]

Originally Posted by marciayudkin

The rules do not go into effect until December 1st.

You can be sure that lawyers are busy drawing up plans now for companies that have the most at stake.

Marcia Yudkin

Maybe, I spoke too soon.

Wal-mart changed it's Affiliate Program TOS.

Unsuitable websites include, but are not limited to, those that:
* Promote sexually explicit material;
* Promote violence or hate toward any persons or groups;
* Promote illegal activities;
* Promote alcohol, tobacco, gambling/lottery in any way;
* Promote the use of pyramid, "ponzi", or similar investment schemes;
* Promote discrimination based on race, sex, religion, nationality, disability, sexual orientation, or age;
* Contain, in our sole judgment, material that is defamatory, fraudulent, or harassing to us or any third party;
* Are known as “blogging sites”, defined for purposes of this Agreement as sites that contain only blogging and no other form of informational content;
* Include "walmart", "wal-mart" or variations or misspellings thereof in their domain names;
* Otherwise violate intellectual property rights of Walmart.com, Wal-Mart Stores or its suppliers;
* Disparage Walmart.com, Wal-Mart Stores, Wal-Mart Stores affiliates, or their suppliers;
* Are under construction or not live at the time of Application;
* Are non-US based or are websites that primarily serve a non-US based audience;
* Do not clearly state an online privacy policy to its visitors; or
* Provide a portion of their Referral Fees (as defined in Section 5) to websites or organizations that would violate any of the above criteria. source: Walmart Tos

Problem Solved!

Here's another little nugget:

13. Relationship of Parties

You and we are independent contractors, and nothing in this Agreement will create any partnership, joint venture, agency, franchise, sales representative, or employment relationship between the parties. You will have no authority to make or accept any offers or representations on our behalf. You will not make any statement, whether on your website or otherwise, that reasonably would contradict anything in this Section.

19. Publicity

You shall not create, publish, distribute, make or permit any public announcement of this Agreement or the relationship contemplated hereunder, (including, but not limited to, any press release, client list, screen shot, advertisement or any promotional material) without first submitting such material to us and receiving our written approval, which we may withhold in our sole discretion. source: Walmart Tos

Does this mean you can get kicked out of Walmart's affiliate program for saying that you are an affiliate?