FTC: No affiliates are in compliance w/review & affiliate sites

13 years ago

Jeannie,
Interesting...

But I had a quick question. Can you clarify who sent this email out?

I assumed it was directly from Legacy Learning Systems...but was it your affiliate manager or directly from the company?

Thanks!
Jack

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Jeannie Crabtree

13 years ago

It was from Matt McWilliams who is Affiliate Manager of Legacy Learning Systems.

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Kay King

13 years ago

Interesting - the only surprising part to me was "above the fold" and the "color".

IN the beginning answers provided by the FTC stated the disclaimer had to be on each page - so I've been surprised at how many sites have used a link to a "disclaimer page" and wondered if that would cause a problem. Apparently so.

I'd think being so specific about the requirements will be an enforcement nightmare for affiliate program providers.

kay

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Kay King 13 years ago

I wonder if this will reach a point where affiliate program managers provide a graphic of the disclaimer that will have to be displayed.
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Sylonious

13 years ago

Originally Posted by Kay King

Interesting - the only surprising part to me was "above the fold" and the "color".

IN the beginning answers provided by the FTC stated the disclaimer had to be on each page - so I've been surprised at how many sites have used a link to a "disclaimer page" and wondered if that would cause a problem. Apparently so.

I'd think being so specific about the requirements will be an enforcement nightmare for affiliate program providers.

kay

The disclosure was always supposed to be made within the body of the text and above the fold. The color is something new that Matt just came up with on the fly. He wants to show that they have "higher standards" when it comes to affiliate marketing.

Technically the disclosure is supposed to be the same color as the rest of the review. It might be against the FTC guidelines to make your disclosure a different color.

If everybody does this you'll have disclosure blindness in the same way you have banner blindness.

So he might be operating at a lower standard by not following the guidelines.

Originally Posted by Jack Duncan

@kindsvater
Very interesting input...

Actually...the first time I read this, the thing that immediately jumped out to me was the date (December 17th)...

It almost reads like an "or else"...but this is just my interpretation.

Sounds like a way to dump a bunch of affiliates very quickly.

Not that they would even think of doing that...it's just that was the first impression I had when I saw the date slipped in there...

Probably nothing though.

He's "2009 Affiliate Manager of the Year" according to his bio so he's got a lot of collateral to spend trying to pull this off.

Looks like he's determined to see this through. He'll find out soon enough that he'll probably have to drop 95% of his affiliates for non-compliance issues in-order to become compliant by that deadline.

Eventually, Legacy Systems will realize that the FTC probably views them as a bunch of con-artists and they ultimately want to put them out of business. By then Matt McMillian will probably be long gone.

Potential customers are probably already skeptical about their product.

Learning how to play piano at home?

My guess is that a bold, colored disclosure like that will give them a good reason to leave the site immediately. They'll search around looking for sites that aren't connected to the company and when they can't find them they just won't buy the product at all.

And the Legacy Systems brand will look even scammier for having a bunch of affiliates all claiming that this is such a "great product".

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kindsvater

13 years ago

Interesting. But these rigid and exacting requirements are not in the FTC guidelines. Nor would they likely survive a 1st Amendment challenge.

Have you ever met someone who is incredibly anal about everything they do, causing unnecessary headaches for you and your organization? Someone who is so "rule oriented" they wouldn't jaywalk across the street to save a baby crawling towards an open pit?

That is what this appears to me.

Using the word "note" instead of "disclosure" is unacceptable?

Black text is unacceptable?

Compensation has to be referenced in a certain place in a disclosure?

No scrolling required? What screen size? Smart phones?

If you're dumb enough to seek out some government bureaucrat about what you can or cannot do this is what you get.

Guess no one will be promoting any products on Twitter anymore. Or in their initial Facebook posts where there is limited text.

And there is no rational reason for distinguishing between promotional text written on a page and the same promotional text on a graphic on a page.

Or, maybe I shouldn't write this post and my law office should excitedly begin preparing for the 100 million lawsuits about to be filed for deceptive advertising.

Thanks Jeannie. I'll be avoiding this absurd affiliate program.

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Jeannie Crabtree

13 years ago

Thanks Brian I appreciate your comments.

I do know you can speak to different people in a government agency and get different answers. They sometimes have their own interpretation on things.

The rules are rather ambiguous I think, but no where did I ever get what this affiliate manager said out of what I read, and did not know of anyone else that did.

I have not started with them and it doesn't look like I will be now. I think this is over the top.

Jeannie

Originally Posted by kindsvater

Interesting. But these rigid and exacting requirements are not in the FTC guidelines. Nor would they likely survive a 1st Amendment challenge.

Have you ever met someone who is incredibly anal about everything they do, causing unnecessary headaches for you and your organization? Someone who is so "rule oriented" they wouldn't jaywalk across the street to save a baby crawling towards an open pit?

That is what this appears to me.

Using the word "note" instead of "disclosure" is unacceptable?

Black text is unacceptable?

Compensation has to be referenced in a certain place in a disclosure?

No scrolling required? What screen size? Smart phones?

If you're dumb enough to seek out some government bureaucrat about what you can or cannot do this is what you get.

Guess no one will be promoting any products on Twitter anymore. Or in their initial Facebook posts where there is limited text.

And there is no rational reason for distinguishing between promotional text written on a page and the same promotional text on a graphic on a page.

Or, maybe I shouldn't write this post and my law office should excitedly begin preparing for the 100 million lawsuits about to be filed for deceptive advertising.

Thanks Jeannie. I'll be avoiding this absurd affiliate program.

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tryinhere

13 years ago

what is exactly above the fold when there are so many screen sizes and resolutions, and where do you park it on a mobile view ?

I think a website should have big red rubber stamp like in a bugs bunny cartoon that jumps out of the screen and stamps people on the head with the word "affiliate"

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imon32red

13 years ago

Originally Posted by tryinhere

what is exactly above the fold when there are so many screen sizes and resolutions, and where do you park it on a mobile view ?

I think a website should have big red rubber stamp like in a bugs bunny cartoon that jumps out of the screen and stamps people on the head with the word "affiliate"

I actually really like this idea. If everyone put the exact same disclaimer on their site it would never get read. Kind of like those FBI warnings before a movie starts. I have no idea how many movies I have seen, but I do know how many times I have read that disclaimer, zero.

What would be even better would be a popup for every site before entering. That way a simple click would get rid of the disclaimer. If you saw that same popup for every site you went to, you would habitually just close it...

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Steven Wagenheim 13 years ago

Brian has spoken...end of story.

I won't be promoting this program (not that I do a lot of affiliate marketing
anyway) but I sure as hell ain't gonna worry about some totally BS rules
like these.

Enforceable?

Not a snowball's chance in hell.

Now if you don't mind, I'm going to go back to concerning myself with things
that matter.

This isn't one of them.
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Jack Duncan

13 years ago

@kindsvater
Very interesting input...

Actually...the first time I read this, the thing that immediately jumped out to me was the date (December 17th)...

It almost reads like an "or else"...but this is just my interpretation.

Sounds like a way to dump a bunch of affiliates very quickly.

Not that they would even think of doing that...it's just that was the first impression I had when I saw the date slipped in there...

Probably nothing though.

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Dan C. Rinnert

13 years ago

Originally Posted by Jeannie Crabtree

Our direct conversations with the FTC.

Reports have consistently shown that, when people call into the IRS for tax help, they will get incorrect information a rather significant amount of the time.

Why would anyone expect anything differently from the FTC?

And if these requirements are not in the written FTC guidelines, as kindsvater says, then what would they go after you on? Are they going to be like the TSA and make up rules as they go along?

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kindsvater

13 years ago

I've seen affiliate rules where the affiliate is not allowed to even mention the merchant or product by name. Why? Some overzealous idiot thought allowing an affiliate to mention the product name they are promoting would be a trademark infringement.

Come to think of it, some of the stupidest stuff I've seen online is in affiliate program rules.

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Terry Crim

13 years ago

Originally Posted by kindsvater

I've seen affiliate rules where the affiliate is not allowed to even mention the merchant or product by name. Why? Some overzealous idiot thought allowing an affiliate to mention the product name they are promoting would be a trademark infringement.

Come to think of it, some of the stupidest stuff I've seen online is in affiliate program rules.

I do not know anything about this program mentioned in this thread. My understanding of the affiliate review type of marketing, whether it is an article, site or what have you. If you do these you must make it clear so that any reasonable person understands your relationship with the product/merchant.

I believe that the FTC wants visitors to your review to be informed that you are benefiting from the review and therefore it is not unbiased. If the visitor decides to purchase based on what you wrote, your video or whatever then they do it with fulll knowledge that you are indeed getting something out of it whether money, free product or whatever.

In reference to disclosure, my understanding is that just having a disclosure on a site even if it is on every page is not good enough. You should disclose in the context of the review how you benefit if at all.

I watch PBS sometimes and during the news they have financial advisors that come on and talk about various stocks and companies and whether they advise for people to buy or not. At the end of the interview they are asked if they personally own or are associated with any of the stocks or companies. That is I believe the type of disclosure that the FTC wants to see.

Make it so any reasonable person fully understands your association with the product and how you personally benefit by giving the review. Don't hide it on page 12 in small print on some page that is linked to at the bottom of your site in small print with color of the link matching closely the background of your site.

Now I am NOT an attorney and I am not an expert in any of this so don't assume following what I say above will protect you at all.

It just makes sense to me that when you build your sites, affiliate pages, blogs etc... that gearing the content to the reader and making them understand as if you were talking to your grandmother about the product, letting her know that if she buys it you will get something from the company when she does.

I don't see the big deal about it really.

- T

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Mike Hill

13 years ago

With all this FTC requirement stuff it will eventually just be the norm and sales will not suffer because people will come to expect it on every single website they visit. Like the Warning messages at the beginning of a movie, that sure hasn't stopped anyone from watching the movie or lending it to a friend now has it?

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Benjamin959

13 years ago

I've never seen like this one. I affiliate with many of big name like cj.com, etc.. I don't have a single problem with them. legacy learning.. I'm glad I will not sign up with them.

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Drewry_Media

13 years ago

I just updated my privacy policy and affiliate link disclosure. I hope I did it right.

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Internet_Corporation

13 years ago

Can you just confirm that the FTC only have jurisdiction over US companies and individuals, other nationals don't have to comply?

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bgmacaw 13 years ago

The thing is that such regulations are so vague that anyone can be prosecuted should the Feds decide that they wanted to go after them. Most people will chose to settle for a plea bargain rather than being totally ruined financially, mentally and emotionally by a federal felony case.

For more on this issue, see Three Felonies A Day.
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- psresearch 13 years ago
  
  Well, the ever-annoying thing about FTC "Guidelines" is that they are "Guidelines" - couple that with the FTC has "broad authority to regulate unfair and deceptive business practices." (i.e. their judgmenet weighs heavily in the determination of fraud) and you have the kind of mess we're seeing here.
  
  The FTC has put out at least 3 conflicting statements about affiliate disclosures that I can recall:
  
  1) On every page
  2) Next to every link
  3) Above the fold
  
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  jorchav 13 years ago
  
  Sheesh! Do we need this?
  
  Let's all hope that the new Congress really does get serious about cost-cutting in Washington, and cuts the FTC budget by 20+ per cent or more.
  
  Enough so that they will have to concentrate on important things and don't have the funds or time to go looking for more things/people/areas of our lives to regulate...
  
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  Malicious links.
  
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  goldie22 13 years ago
  
  Have you noticed how the FTC seems to have so much time to focus on the little guys promoting affiliate products yet they do nothing to the big companies with the deep pockets.
  
  For example when you see those infomercials promoting their products and they have will have their fine print details and disclaimers in print so small you can't read it and it only flashes across the screen for a few seconds, so you don't have time to read it. This is a practice that has been going on for years and the FTC has no problem with people getting scammed by infomercial products that these companies make millions from, yet they focus on the little affiliate who may make a commission promoting someone else's product!
  
  Nor do they go after someone like the Cable company who recently told me they would transfer my service to a new address for free as long as I kept all the same services, then they turn around and slap me with a $140 in install fees! When I called them about, they just say well someone gave you wrong information, so you still owe us the money. The cable company does this because they know they can get a way with it even if you file a complaint (which I have done).
  
  It's just another example of the government going after the little people because they are easier targets and don't have the deep pockets for legal fees that the big guys do.
  
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James Campbell 13 years ago

Originally Posted by Chris Kent

If you sell to US customers, you come under FTC rules.

Correct answer: check with your lawyer
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- HeySal 13 years ago
  
  Originally Posted by James Campbell
  
  Correct answer: check with your lawyer
  
  The FTC has gone after people in other countries already.
  
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  James Campbell 13 years ago
  
  Originally Posted by HeySal
  
  The FTC has gone after people in other countries already.
  
  That doesn't really matter. It is important to check with your lawyer on matters such as these.
  
  If you host in a different country, serve your product from a different country and your payment processor is located in a different country, then chances are the FTC wouldn't be able to do anything.
  
  The US govt is not the world govt, and should not be treated as such.
  
  Check with your lawyer in YOUR country, give them all the information you can, including location of your servers, payment processor location, etc.... and they should be able to help you out.
  
  James
  
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tdd1984

13 years ago

Originally Posted by Jeannie Crabtree

I am going to include most of the email as I find this surprising. No affiliates are in compliance with review sites & affiliate sites FTC says.

What do you think about this?

"Earlier this week I told you that we are making some changes to our affiliate policies. The first and biggest change is required by the FTC. They informed us that our review affiliates (that is any affiliate doing a review of our course on their site) were not in compliance. Literally, not a single one. That sure took us by surprise!

What that means is that if you have a review on your site, and you think that you have a proper FTC disclosure, you actually don't and we need to get you in compliance right away.

We can help clear up the confusion, but if you have a review of any course on your site, you will have to change your disclosure right away (by December 17).

We have put together a short document that spells out the new requirements very clearly. You can find them here: Legacy Learning Systems Disclosure Requirements. Affiliate Disclosure Requirements and Examples

You will notice that some of the rules are totally new, including that your disclosure will now have to be in colored text, appear above the fold, and not rely on a clickable link. Other requirements also apply that you've probably never heard before. Again, if you have a review on your site of any of our courses, you MUST read this and get your site into compliance.

Take a look at the information here: Legacy Learning Systems Disclosure Requirements

Where did these requirements come from?

They are based primarily on the following:
December 2009 FTC Disclosure Guidelines
FTC disclosure guide from May 2000, which the FTC has told us is still very much in effect.
Our direct conversations with the FTC.

We recognize that most popular interpretation of the 2009 FTC Disclosure Guidelines is that having a short disclosure or link to a disclosure at the bottom of the review page is adequate. The FTC has told us that it is not. It is quite possible that the FTC will be cracking down on this industry wide, so I also suggest making these same changes to all of your review sites, not just the ones that promote our products".

What do you mean your making changes to your affiliate policy?

What company do you work with? The FTC could tell you anything. However, if I am correct, they do not make the laws. Wouldn't you think it would be better to consult with an attorney?

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dave147

13 years ago

Didn't we have this conversation, or similar, round about this time last year?
What's that feeling called? the one where you think you've been there before?

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Josh Anderson

13 years ago

Has anyone reviewed this interview that gets very specific on how to comply:

FTC (Federal Trade Commission) Clarifies New Internet Marketing, Blogging & Affiliate Advertising Guidelines With Jim Edwards |

The interview is with Mr. Rich Cleland, Assistant Deputy at The Federal Trade Commission.

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FTC: No affiliates are in compliance w/review & affiliate sites

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