Bloggers, Marketers & Affiliates Beware! FTC Has Laid The Smackdown!

70 replies
UPDATE: As of 12AM 10/6/09:
Since the passing of this FTC bill, I have since come across a few Internet Marketers & their sites who have taken the FTC regulations seriously and are already starting to comply with some of the rules.

Guys, it's so simple. I won't name the sites, but I will provide you with the content of what is "NOW" being disclosed clearly & precisely on their sites right on the Sales Page (MAIN PAGE), with Asterisks (meaning they were added & relate to some point being made within their sales page) & subscript numbers, etc.

Full Disclosure will now become the norm!!! This is some of the legalese that was clearly placed on a sales page disclosure section:

========
1. MATERIALS IN OUR PRODUCT AND OUR WEBSITE MAY CONTAIN INFORMATION THAT INCLUDES OR IS BASED UPON FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS GIVE OUR EXPECTATIONS OR FORECASTS OF FUTURE EVENTS. YOU CAN IDENTIFY THESE STATEMENTS BY THE FACT THAT THEY DO NOT RELATE STRICTLY TO HISTORICAL OR CURRENT FACTS. THEY USE WORDS SUCH AS "ANTICIPATE," "ESTIMATE," "EXPECT," "PROJECT," "INTEND," "PLAN," "BELIEVE," AND OTHER WORDS AND TERMS OF SIMILAR MEANING IN CONNECTION WITH A DESCRIPTION OF POTENTIAL EARNINGS OR FINANCIAL PERFORMANCE.

** TO PROTECT THE PRIVACY OF THE TESTIMONIAL GIVER, IMAGE OF TESTIMONIAL IS FOR REPRESENTATION OF THE TESTIMONIAL GIVER AND NOT OF THE ACTUAL TESTIMONIAL GIVER. ALL TESTIMONIAL TEXT IS REAL AND LEGITIMATE.


Overall, there are still issues with the 2nd statement in the disclosure, but as you can see, it's already starting. The good thing is that the owner of this product clearly stated that the "IMAGE OF Testimonial is for representation of the testimonial." The problem is that it doesn't clarify if the image is of a real person, & contradicts the statement stating the "testimonial test is real and legitimate"

The whole key to Disclosures from a Fraud & Forensic Investigation perspective is to have an audit trail of fact based information. If you don't have that, & it's not clear, you will be liable to offenses of $11,000 per offense. Just be truthful & accurate people!

Today, the Federal Trade Commission has passed guidelines on Advertisers & how endorsements, bloggers, & testimonials must adhere to new standards. Fines will be $11,000 for each offense.

I'm personally glad about this, whereas, it's about time something was done of all the False Product Testimonials, inaccurate information, and "Claims" of making millions without disclosing actual facts when confronted.

It has gone on for far too long for these crazy claims where too many people can't produce the results that they portray. Also, what will be happening soon as well, is Affiliate Marketers must disclose that if they:
1. Are an affiliate marketer
2. If they have received payments or freebies from promoting the product
3. To clearly disclose the results that a consumer can expect.

What I think will be happening as well, is that there will be a crack down on ridiculous statements such as "Not everyone will receive same results" kinds of statements, whereas, a person (not the owner) promoting who claim results will have to prove it & be very clear in disclosing it.

For enforcement, you will definitely see a crack down by the FTC, but it will mostly be up to the people who will have to report infractions. This means, marketers who BS their sales letters, have testimonials of people who never even used there product will be called out openly & publicly. Expect to see tons of Consumer Reporting & Rip Off report Sites go on the rise!


Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides - which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as "results not typical" - the revised Guides no longer contain this safe harbor.

Now, some may disagree with the FTC whereas, free speech & constitution issues, however, this is about protecting the people. The fact of the matter is that it's too easy to Scam, vs. providing a Product or Service that actually works. We need to bring more truth not only to the country but also the world.

Bottom line, if your product produced results for you, you better be able to clearly back that up, otherwise, don't complain about refunds!!

It's about time we bring quality of service and level of effort back to our work ethics. But that's just my opinion on that matter.

I'll definitely tell you though, I'm definitely scrutinizing every new sales letter, product, promoter, just in HOPES I can find some false claims.

What are your thoughts?

New FTC Guidelines Here
#affiliates #beware #bloggers #ftc #laid #marketers #smackdown
  • Profile picture of the author sbucciarel
    Banned
    Well, it's going to be very difficult if not impossible for them to police millions of posts.

    "The FTC's published discussion of its rules indicates that the agency will rely mainly on self-regulation, with enforcement action only in the most egregious cases, much as it does in dealing with online fraud. "
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  • Profile picture of the author RGallowitz
    I highly doubt they are going to pursue any small time affiliate marketers.
    They will tackle the big boys. And it's going to be REALLY hard for them to take on people from third world countries.

    It's going to take years more.


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    Reinhardt
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  • Profile picture of the author Brad Gosse
    They will pick a few big fish at a time to make examples out of. This is how the feds operate.
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    • Profile picture of the author A Bary
      I really appreciate these new rules..
      May be this will help to bring back some ethics to this business, especially the making money market..
      Let's have fun watching the scam clowns try to tolerate these new rules (they spend there time and effort turning around the rules instead of trying to build an honest real business).
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  • Profile picture of the author plugsnpixels
    I read this news this morning and rushed over to the WF to see what others thought!

    I am involved in the affiliate marketing of Photoshop-related software (URL in sig). I'm not a celebrity and I don't think I make claims to the degree that would concern the FTC. I do receive NFR versions of each product, but no cash payment unless I produce referral sales, but I suspect that's different.

    I'd be interested in hearing Darrin's and others' opinions about how this ruling will affect my type of site (and no, I'm not advertising it here ;-) ).
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  • Profile picture of the author l23bc
    whats going to happen if your out of ftc enforcement i wonder like another countries such as europe or were i am in the u.k, How can they enforce that

    To be quite honest it sounds more like a ron paul therory on youtube on how people are trying to senorship the internet and how people or companies use it? the chance for people to have the right as a customer to have some enforcement.
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    • Profile picture of the author Alexa Smith
      Banned
      [DELETED]
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      • Profile picture of the author halfpoint
        Originally Posted by Alexa Smith View Post

        who KNOWS?!
        This is exactly the problem. What I just read was so vague that it's impossible to understand what you need to do and what you shouldn't do.

        It'll be interesting to see what happens but I'm not too worried just yet.
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  • Profile picture of the author Gail Sober
    I reported a site once for sending very bad spam links to me and heard back from them three years later requesting a copy of the email and additional information.

    I hope they are hiring or their backlog will now be 10yrs or more.
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  • Profile picture of the author darrin_cooper
    At the end of the day, it's definitely about the big fish that the FTC wants to fry. However, from a legal point of view, the little fish are not exempt either.

    What will happen is once issues come in, a formal & normalized process will take place. They have already laid out a framework. So, it's really up to the people to start policing the products they purchase. For example, Craigslist has a system & process of which you can report fraudulent classified ads. The more people complain about a certain ad, its removed.

    The same concept will apply on a legal & federal level. If the PEOPLE actually involve themselves, provide actual & factual information, vs. bits & pieces, then the process will work for all. Therefore, that's why it's critical if people are making the accusation to have very clear & detail information. Scrutinize, but back up the statements they are making. For example,:
    1. Testimonials: You make a claim on a testimonial by verifying if 1.) the person is real, 2.) the person providing the testimonial really used the product & received the claimed benefit, 3.) A disclosure of information of the testimonial, 4.) Accuracy of testimonial (whether or not the results of the claimed benefit can be verified).

    Now, that's just one example in one category. Now in each of those areas, there will possibly be a weight & measure placed on how deep is the infraction and how wide it goes. So, what I think will happen is there will be more sites like Rip off Reports & Consumer Internet report style sites that provide more deep & accurate information RATHER to warn consumers & to document fraud.

    At the end of the day, this is just a focused effort for people to wake up, stop the fraud, and get people involved, rather just sit on the sidelines.
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    • Profile picture of the author darrin_cooper
      Of course. Affiliate marketers are just promoters, promoting a product in their own self-interest.
      The issue is that with Affiliates, you don't know the TRUE relationship between them all. A perfect example is when you see a 10 GURU products, and then you have the same 10 people as the highest affiliates promoting their products. The question is: 1.) is that true, 2.) how accurate is that information, 3.) why is it that the same 10 people across 10 various products are all the same?

      Then if you actually do your research, you will find:
      1. Sometimes there is a SEPARATE SPECIAL Affiliate lists for their friends
      2. There are special gifts given for certain affiliates
      3. There is potential collusion amongst a group of affiliates
      Those are just some grey areas that can cause potential problems without proper disclosures & to have a clear understanding of the relationships between the promoter & the product owner.


      Originally Posted by ppcpimp View Post

      you guys read this as being directed at affiliate marketers?
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      • Profile picture of the author ppcpimp
        according to our attorneys the FTC first started looking into this with the pay per post blog explosion happened. I was not saying that AM are not going to fall into this group with the language they used. I typically don't ever look at "guru" products as most gurus are not gurus.

        Originally Posted by darrin_cooper View Post

        Of course. Affiliate marketers are just promoters, promoting a product in their own self-interest.
        The issue is that with Affiliates, you don't know the TRUE relationship between them all. A perfect example is when you see a 10 GURU products, and then you have the same 10 people as the highest affiliates promoting their products. The question is: 1.) is that true, 2.) how accurate is that information, 3.) why is it that the same 10 people across 10 various products are all the same?

        Then if you actually do your research, you will find:
        1. Sometimes there is a SEPARATE SPECIAL Affiliate lists for their friends
        2. There are special gifts given for certain affiliates
        3. There is potential collusion amongst a group of affiliates
        Those are just some grey areas that can cause potential problems without proper disclosures & to have a clear understanding of the relationships between the promoter & the product owner.
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        • Profile picture of the author darrin_cooper
          It's definitely ALL Marketers, offline, online, everywhere.
          Everyone needs to look at the whole framework of the concept & apply it to their businesses BETTER than (not as best you can) but better than that.

          It's that simple. It's not a silo effect, trying to weed out a certain category such as "bloggers" or a certain type of fraud. The FTC's goal is to uncover it all.

          I was just watching a television commercial, about the Eye Drops, I believe the problem was Rostastia. If you are in America, many of you will know what i'm talking about. They run this ad a lot. You know when you get so used to ads you can really remember them verbatim almost.
          But this time, at the end of the 30 second spot, there was a major difference, they said the following:
          Paraphrased:
          "XXXX, is an actor and not a doctor. And XXX, has been compensated for this commercial" ---

          It's definitely happening already. I never heard that line ever in the commercial & now I do.




          Originally Posted by ppcpimp View Post

          according to our attorneys the FTC first started looking into this with the pay per post blog explosion happened. I was not saying that AM are not going to fall into this group with the language they used. I typically don't ever look at "guru" products as most gurus are not gurus.
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          • Profile picture of the author Lee56
            Originally Posted by darrin_cooper View Post

            It's definitely ALL Marketers, offline, online, everywhere...I was just watching a television commercial, about the Eye Drops, I believe the problem was Rostastia...But this time, at the end of the 30 second spot, there was a major difference, they said the following:
            Paraphrased:"XXXX, is an actor and not a doctor. And XXX, has been compensated for this commercial" ---

            It's definitely happening already. I never heard that line ever in the commercial & now I do.
            I wonder where the sales letter fictional persona fits into all this? I don't use one, but I'm curious. Copywriter Michael Fortin has an old post on his site about using an alias in the sales letter. Basically it sounds like it's fine as long as no false claims are made about the product, although I may have missed something. I think here should be some sort of statement like in the commercial you mentioned. "XXX is a fictional character." Some marketers compare to pen names on books, but that is not the same at all. The pen name on a book doesn't have an author's bio? Anyway I'm glad to see the FTC is taking steps to bring honesty to marketing online.
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    • Profile picture of the author plugsnpixels
      Originally Posted by ppcpimp View Post

      you guys read this as being directed at affiliate marketers?
      That was my first thought. Though I personally don't think my type of affiliate products will be a problem, and besides, I create my own custom examples of their usage for posting on my site, so I know they work.

      Thankfully these products don't promise weight loss or the accumulation of wealth!
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  • Profile picture of the author Centimetro
    These laws are SO vague, and since the FTC made its intentions clear, I've seen so many people think that they're on some kind of moral high ground where they're safe.

    With vague rules such as these, they can be twisted to fit just about ANYONES business model. If you're making any sort of money online at all, I highly doubt that you are 100% safe from the FTC if they truly chose to hone in on you for whatever reason.

    It's very arrogant to assume that you have a full understanding of what these laws actually mean and who is or isn't safe when the guidelines themselves are LITTERED with completely subjective terms.

    P.S. I find the posts from people suggesting that they want to "rat out" their fellow marketers absolutely disgusting
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  • Profile picture of the author wolfshaman
    I'm confuzzled... If a product is full of false claims and uses fake testimonials isn't the guy who actually sells the product the one laible for the fraud? How is the affiliate culpable?

    Also, where is the burden of proof? In our justice system one is not immediately presumed guilty as soon a the complaint is filed. The feds will have to build a case worthy of prosecution so I have to agree with above posts they'll be too busy trying to fry the big fish and it may take years for them to get around to the little guys.
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  • It seems fair in one way -- people using false statements to sell things are the scum of the earth whether it's the "guru" promising desperate people the moon or the slick car salesman throwing your car keys on the roof of the dealership when you take a test drive.

    In another way, it seems unfair. Why should the affiliate be responsible for the false claims of a vendor? Plus, the Internet is global. This puts American marketers in a good spot to take the high ground, but it surrenders the very profitable low ground to shady overseas operations. In that sense, it also opens the door to Internet censorship as those sites will be blocked. Before long, we're all China, with a censored Internet.
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    • Profile picture of the author discrat
      Yeah I think this is a good thing. Especially with some of the Products being hawked by Afffiliates these days. I mean honestly, how can someone really believe that a ClickBank Product can be capable of adding inches in heigth on a full adult human being ??
      This kind of stuff is ridicolous and needs to cracked down on !!
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    • Profile picture of the author Steven Wagenheim
      I've been doing the smart affiliate marketer thing since day 1.

      First of all, I make no claims in my reviews. I tell what the product does,
      what I like about it and what I don't like. If it's an IM related product, I
      don't say things like "You will make $X a month" or anything like that. I
      say that I think it will help you with your business.

      Sales pages, again, no claims.

      I don't make as much money as the big boys but I have absolutely nothing
      to worry about when it comes to the FTC. Heck, most of my sales pages
      don't even have testimonials (something I have been criticized for)

      As for how I feel about it, honestly, I don't even care since it doesn't
      affect me. If an affiliate of mine (have few of those) puts up a blog and
      lies about one of my products, making crazy claims, it's HIS butt on the
      line...not mine.

      So as far as I'm concerned, the FTC can do whatever it wants.

      At worst...we have fewer lying skeeze buckets online

      At best...we have fewer lying skeeze buckets online.

      It's a win-win the way I see it.
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  • Profile picture of the author pcpupil
    I actually think it wouldnt be that hard to do.I could do it with a Dozen people full time.
    I know i could put a dent in the way marketing is done.Mostly like already mentioned with scare tactics.
    Theres an old rule:
    "They might be a Bad person,but they could be a Good example!"
    Just by reading this post i have 3 ways already in my head.
    Matt
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  • Profile picture of the author ECS Dave
    From the page at FTC Publishes Final Guides Governing Endorsements, Testimonials

    The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.
    By NO MEANS am I a legal eagle, or such, but it's my strong opinion that if you are an affiliate marketer, and you market ethically, you've nothing to worry about.

    Even so, I have placed a "new" footer link on my blog, and will probably be adding that to my other sites as well...

    Be Well!
    ECS Dave
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    • Profile picture of the author plugsnpixels
      Originally Posted by ECS Dave View Post

      By NO MEANS am I a legal eagle, or such, but it's my strong opinion that if you are an affiliate marketer, and you market ethically, you've nothing to worry about.
      I'm getting that impression as well, so I won't spend time stressing.
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  • Profile picture of the author mikkosant
    Time to start building your email lists...
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  • Profile picture of the author l23bc
    Landmark Ruling: Judge Orders Google to Hand Over Identity of Anonymous Blogger

    different sitution but very scary and some aspects scary if you are a blogger if the ftc have control of blogging does that mean blogging will go underground in some ways, i mean look at how china banned some websites or syria yet people blogged their views an comments to show the world

    all the ftc has to do is ask if you use blogger.com or even wordpress the account owner details an google will hand them over

    just a idea on sitution
    andy
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  • Profile picture of the author darrin_cooper
    UPDATE: As of 12AM 10/6/09:
    Since the passing of this FTC bill, I have since come across a few Internet Marketers & their sites who have taken the FTC regulations seriously and are already starting to comply with some of the rules.

    Guys, it's so simple. I won't name the sites, but I will provide you with the content of what is "NOW" being disclosed clearly & precisely on their sites right on the Sales Page (MAIN PAGE), with Asterisks (meaning they were added & relate to some point being made within their sales page) & subscript numbers, etc.

    Full Disclosure will now become the norm!!! This is some of the legalese that was clearly placed on a sales page disclosure section:

    ========
    1. MATERIALS IN OUR PRODUCT AND OUR WEBSITE MAY CONTAIN INFORMATION THAT INCLUDES OR IS BASED UPON FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS GIVE OUR EXPECTATIONS OR FORECASTS OF FUTURE EVENTS. YOU CAN IDENTIFY THESE STATEMENTS BY THE FACT THAT THEY DO NOT RELATE STRICTLY TO HISTORICAL OR CURRENT FACTS. THEY USE WORDS SUCH AS "ANTICIPATE," "ESTIMATE," "EXPECT," "PROJECT," "INTEND," "PLAN," "BELIEVE," AND OTHER WORDS AND TERMS OF SIMILAR MEANING IN CONNECTION WITH A DESCRIPTION OF POTENTIAL EARNINGS OR FINANCIAL PERFORMANCE.

    ** TO PROTECT THE PRIVACY OF THE TESTIMONIAL GIVER, IMAGE OF TESTIMONIAL IS FOR REPRESENTATION OF THE TESTIMONIAL GIVER AND NOT OF THE ACTUAL TESTIMONIAL GIVER. ALL TESTIMONIAL TEXT IS REAL AND LEGITIMATE.


    Overall, there are still issues with the 2nd statement in the disclosure, but as you can see, it's already starting. The good thing is that the owner of this product clearly stated that the "IMAGE OF Testimonial is for representation of the testimonial." The problem is that it doesn't clarify if the image is of a real person, & contradicts the statement stating the "testimonial test is real and legitimate"

    The whole key to Disclosures from a Fraud & Forensic Investigation perspective is to have an audit trail of fact based information. If you don't have that, & it's not clear, you will be liable to offenses of $11,000 per offense. Just be truthful & accurate people!

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  • Profile picture of the author bettersocial
    How will it impact people who aren't in the US? People outside the US can completely get away without following these guidelines.

    Does this mean that marketers outside the US will now have an unfair advantage over those in the US?
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  • Profile picture of the author TelegramSam
    Originally Posted by darrin_cooper View Post


    I'll definitely tell you though, I'm definitely scrutinizing every new sales letter, product, promoter, just in HOPES I can find some false claims.

    What are your thoughts?

    Hey Dude, I'll tell you what my thoughts are.

    Whilst I appreciate you starting the thread and your comments, I certainly don't appreciate your comment I have quoted above.

    Who do you think you are?

    Are you part of the Internet Police?

    Do you realise that there may be many "innocent" or "ignorant" marketers who fail to "abide" by the rules. Some may be oversights, some may be deliberate.

    But do you realise just how much of a **** storm you could cause for some innocent little guy or gal working from home.

    I have witnessed lives ruined by these ******-******* at the FTC.

    Are you perfect?

    Are every one of your sites 100% legitimate?

    How do you know for sure that there isn't some law somewhere that you aren't breaking?

    Would you like your competition to completely crap all over you and then to be left alone to pick up the peices after you have been well and truly ******?

    Your vindictive attitude makes me want to find a bucket. Also what's with the BOLD writing and the Anonymous mask? I also note you have been a member for a few months, have made quite a few comments, over 200 in fact, but have yet to thank anyone. Mmmm, interesting that!

    Grow up.
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    • Profile picture of the author Jay Truman
      Originally Posted by darrin_cooper View Post

      I'll definitely tell you though, I'm definitely scrutinizing every new sales letter, product, promoter, just in HOPES I can find some false claims.

      What are your thoughts?
      hmmm.... can we start with your WSO?

      Your telling me I can make 5600 Per Month with your biz op and with out proper disclaimer and disclosure? Im not sure if this will sit well with the FTC, should we send them your WSO to make sure theres no false claims and your advertising is legit?

      I have a contact there on my email list, I don't mind sending an email.
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      • Profile picture of the author JohnMcCabe
        Originally Posted by plugsnpixels View Post

        I read this news this morning and rushed over to the WF to see what others thought!

        I am involved in the affiliate marketing of Photoshop-related software (URL in sig). I'm not a celebrity and I don't think I make claims to the degree that would concern the FTC. I do receive NFR versions of each product, but no cash payment unless I produce referral sales, but I suspect that's different.

        I'd be interested in hearing Darrin's and others' opinions about how this ruling will affect my type of site (and no, I'm not advertising it here ;-) ).
        If you check the big sites that do software and computer reviews, you often see a line somewhere in the text saying "X Company furnished Model Z for purposes of this review."

        If you use the product and produce the results, I don't see how it makes a difference whether you paid for the product or not. Just be up front about it. "My site publishes reviews about this type of software, so makers of the software sometimes furnish review copies. Furnishing that copy does not guarantee a positive review, or any review at all."

        Originally Posted by SurviveUnemployment View Post

        In another way, it seems unfair. Why should the affiliate be responsible for the false claims of a vendor? Plus, the Internet is global. This puts American marketers in a good spot to take the high ground, but it surrenders the very profitable low ground to shady overseas operations. In that sense, it also opens the door to Internet censorship as those sites will be blocked. Before long, we're all China, with a censored Internet.
        Turn it around.

        You are a vendor. Your sales site does things right, every claim provable, every testimonial on file. I want to be your affiliate, but I don't think your site hits hard enough. So I put up a few hundred flogs making "juicier" claims, and write some killer testimonials. Then I spam the links to those flogs far and wide. I'm so flagrant about it that several people file complaints and the feds decide to look into it.

        They decide that, yes, there's a lot of fraud around your product and decide to prosecute.

        Why should you have to take the heat?
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  • Profile picture of the author blur
    I'm going to play the devil's advocate here. I DO THINK THIS IS GREAT but there are so many loopholes.

    1 - To get a conviction on a false claim or promise one would have to actually buy the product and use it and prove it doesn't work. You think the FTC has a budget to purchase our products, follow them, and use them? Testimonials are another thing as you should always keep hard copy of this...

    2 - Offshore hosting is only a click away. I'm not telling anyone to circumvent the law, but who's to say that the people in question won't just move their product sales pages to an offshore server and use a different identity?

    3 - How are you to control what affiliates are promoting your product and what they are saying about it?

    I think this is a great step in trying to control the crazy claims by some marketers. Ultimately the real responsibility lies with the buyer.
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  • Profile picture of the author JayXtreme


    What?

    You mean factual based reviews without puffed up testimonials and lies?

    :confused:

    What is this industry coming to?

    Peace

    Jay

    /sarcasm
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  • Profile picture of the author blur
    If you're smart and you DO follow the actual FTC guidelines as stated, I would make a huge deal about it on your sales pages. To have real testimonials, real claims, and following the FTC guidelines should be a huge boost for sales.

    I would make a burst or seal and place it 'above the fold' or even make it one of those page peels. Make a huge deal about it because if you do and your competition doesn't, there's your advantage.
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  • Profile picture of the author DASHBOY
    This is probably long over due (understatement).

    Will it work? Don't think so I am sure marketers will get round this in time.

    Theres just too many variables. With any product the person who puts in the most time and dedication will reap its benefits, whilst most will give it a half hearted bash and move onto something else and possibley claim it never worked.

    Later

    Graeme
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  • Profile picture of the author Jon Tees
    I just tell people what they need to know to spark their interest. They can find out more detailed information on the website.
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  • Profile picture of the author MichaelHiles
    I just drank the most delicious beverage. It is called Diet Coke. It was cold and crisp, and I really liked it. I will likely drink another one soon.






    This post is the express opinion of the author, and is protected under the 1st Amendment.
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    • Profile picture of the author darrin_cooper
      The problem is Mike, is that in your "illustration", YOU are not "selling" Diet Coke to profit from it. So your logic is not in the framework of the FTC legislation.

      Although funny, but it's just out of scope, based on what is trying to be achieved. The goal here is to create better & safer market places for consumers and to provide accountability on behalf of product & service sellers.

      There's nothing against "First Amendment" & Free Speech...those aspects are irrelevant. It's the fact that when "Free Speech" gets stomped on, for example, when a person yells Fire in a Crowded theater.

      This is the concept & the framework that this is under, and the goal is to reduce fraud & make people more accountable.


      Originally Posted by MichaelHiles View Post

      I just drank the most delicious beverage. It is called Diet Coke. It was cold and crisp, and I really liked it. I will likely drink another one soon.






      This post is the express opinion of the author, and is protected under the 1st Amendment.
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      • Profile picture of the author MichaelHiles
        Originally Posted by darrin_cooper View Post

        The problem is Mike, is that in your "illustration", YOU are not "selling" Diet Coke to profit from it. So your logic is not in the framework of the FTC legislation.

        Although funny, but it's just out of scope, based on what is trying to be achieved. The goal here is to create better & safer market places for consumers and to provide accountability on behalf of product & service sellers.

        There's nothing against "First Amendment" & Free Speech...those aspects are irrelevant. It's the fact that when "Free Speech" gets stomped on, for example, when a person yells Fire in a Crowded theater.

        This is the concept & the framework that this is under, and the goal is to reduce fraud & make people more accountable.
        I'll sell you the rest of the 12 pack I have in the fridge. One heck of a deal.
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      • Profile picture of the author Dan C. Rinnert
        Originally Posted by darrin_cooper View Post

        The problem is Mike, is that in your "illustration", YOU are not "selling" Diet Coke to profit from it. So your logic is not in the framework of the FTC legislation.
        What if he owns stock in Coca-Cola? What if he has a mutual fund that has some shares in Coca-Cola? What if he has a family member that works for Coca-Cola? What if he does business with Coca-Cola? What if he does business with a company whose largest client is Coca-Cola? Or, what if he just wants to make sure that people buy Diet Coke because he enjoys it and wants to make sure they don't stop making it any time soon?

        In any of those cases, isn't he "selling" Diet Coke to profit from it? In each of those cases, he benefits in some way if Diet Coke sells.

        The goal here is to create better & safer market places for consumers and to provide accountability on behalf of product & service sellers.
        Yep. Keep drinking that Kool-Aid.

        This is the concept & the framework that this is under, and the goal is to reduce fraud & make people more accountable.
        Looks to me like it puts a greater burden on people that weren't committing fraud to begin with, while those that were committing fraud will just continue to do so, no?
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        • Profile picture of the author darrin_cooper
          I like Kool Aid.

          Dan, you should try working in one of the Big 3 Accounting Firms or a large consulting firm. Your anologies about owning Coca Cola is the same concepts & rules and responsibilities set out in large companies who provide services for clients.

          At these types of firms, you have to disclose EVERY stock you have, every relationship you have, EVEN your family members potential conflicts of interests. A lot of people just won't get it, but it simply about stating involvements & intentions by being open & transparent. And NO, in most of your cases, it's NOT "direct selling" --that's the point your are missing here.

          My example goes back to a prominent & note worthy blogger & now company TechCrunch was started & outed one company PayPerPost for the model they had. PayPerPost used to give Bloggers money for product reviews without proper disclosures. Now, it's required of members of PayPerPost that they must state that they are being paid for their review. It's a common sense approach to a problem. Now, in regards to TechCrunch, whenever this blogger has interests, whether it be stock ownership in a company, or they have some type of monetary or secondary interest, in the blog posts, they CLEARLY state that fact, even disclosing sometimes number of shares, etc.

          But hey, if the kool aid is too sweet for ya, just don't drink it......

          If you OWN something, or you promote it out of your own self-interest & expect to get paid, you should fess up disclose that information.


          Originally Posted by Dan C. Rinnert View Post

          What if he owns stock in Coca-Cola? What if he has a mutual fund that has some shares in Coca-Cola? What if he has a family member that works for Coca-Cola? What if he does business with Coca-Cola? What if he does business with a company whose largest client is Coca-Cola? Or, what if he just wants to make sure that people buy Diet Coke because he enjoys it and wants to make sure they don't stop making it any time soon?

          In any of those cases, isn't he "selling" Diet Coke to profit from it? In each of those cases, he benefits in some way if Diet Coke sells.



          Yep. Keep drinking that Kool-Aid.



          Looks to me like it puts a greater burden on people that weren't committing fraud to begin with, while those that were committing fraud will just continue to do so, no?
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  • Profile picture of the author blur
    To maybe move this in a different direction, I went to the page and read the summary of the revised statutes and there is one thing I have a question about:
    The revised Guides also add new examples to illustrate the long standing principle that "material connections" (sometimes payments or free products) between advertisers and endorsers - connections that consumers would not expect - must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other "word-of-mouth" marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement - like any other advertisement - is deceptive if it makes false or misleading claims.
    So, if I'm reading this correctly, that every time a seller gives cash or product for a review that those arrangements must be disclosed also? If Joe pays Jane $50 for a review then that cash exchange must be disclosed? If an author gives out 23 copies of their software for a review/endorsement, then that must be disclosed with the testimonial/endorsement/review.

    Am I correctly reading this or making mountains from ant hills.
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    • Profile picture of the author darrin_cooper
      Yes, you are absolutely reading it correctly. I don't think you have to disclose how much, but the fact that cash was exchanged & there was a recipient.

      It's already happening, seriously start watching commercials, not just the late night ones, but Medical Professional style commercials. I've seen a bunch today, and at the end, they are disclosing the fact that there are paid actors. If you are in the U.S. then you can verify this. I don't know what's happening oveseas in regards to commercials.

      But the example I have seen is the Rostaia eye commercial, about contacts & eye drops. ( I spelt it wrong I know).

      Also, yes, you are also correct in these types of disclosures, where a prominent & note worthy blogger & now company TechCrunch was started & outed one company PayPerPost for the model they had. PayPerPost used to give Bloggers money for product reviews without proper disclosures. Now, it's required of members of PayPerPost that they must state that they are being paid for their review. It's a common sense approach to a problem.

      If you OWN something, or you promote it out of your own self-interest & expect to get paid, you should fess up disclose that information.


      Originally Posted by blur View Post

      To maybe move this in a different direction, I went to the page and read the summary of the revised statutes and there is one thing I have a question about:

      So, if I'm reading this correctly, that every time a seller gives cash or product for a review that those arrangements must be disclosed also? If Joe pays Jane $50 for a review then that cash exchange must be disclosed? If an author gives out 23 copies of their software for a review/endorsement, then that must be disclosed with the testimonial/endorsement/review.

      Am I correctly reading this or making mountains from ant hills.
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  • Profile picture of the author David McKee
    Originally Posted by MichaelHiles View Post

    I just drank the most delicious beverage. It is called Diet Coke. It was cold and crisp, and I really liked it. I will likely drink another one soon.

    This post is the express opinion of the author, and is protected under the 1st Amendment.
    I am going to say what no one else is... The FTC, along with most of the other agencies of the Government, destroys everything it touches. That is doubly true with regard to Capitalism.

    I state for the record that I am a Free Market, Ayn Rand Capitalist, and that Government governs best which governs least.

    The bottom line is there will always be scammers - in fact here is the ultimate question:

    Q: What does a scammer do when the government runs his business out of town???
    A: He runs for office.

    Well, that was my rant - I suppose I should tie it in to Internet Marketing: I intend to continue to use the excellent business practices I have been using. And then convert my quickly devaluing paper money to gold (have you seen the price rise today?!?!)...

    And to the buyer (and the FTC) I say, as always: "Caveat emptor"

    -DTM
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  • Profile picture of the author blur
    OK - So I have some more questions on this. I work for a company that uses testimonials A LOT in their marketing. We provide a client a service then the client sends us a testimonial.

    Let's say the client pays full price for the service and they in no way get any benefits from the testimonial, what do we have to disclose? I mean we're dealing with professionals, organizations, and branches of the US Gov.
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    • Profile picture of the author darrin_cooper
      Blur,

      Overall, you aren't providing enough information to discuss your situation. But I'm pretty sure your legal dept. should be verifying sales/marketing materials before its put out in public.

      However, it's the "statements & claims" made in the testimonial that's the issue. And it's not any old type of testimonial, it's about RESULTS based testimonial. Now, if there is a "results based testimonial" then that has to be backed up with a disclosure (it seems like the standard is going on the front pages or easy to find, etc), whereas, they will need to define whether if that person providing the testimonial received monetary compensation, OR, a freebie for giving that testimonial, AS WELL AS, a statement stating that results may be different.

      Do you see the audit trail that's formed here?

      In specifically answering your scenario, if a client pays for a service, receives no benefit, and provides you a testimonial, your company would have to disclose the "relationship" of the person providing testimonials.
      For example: All representatives providing testimonials are Real/Actors/ have been given/not given compensation for their testimonial."

      remember, Testimonials is only ONE aspect of the guidelines & legislation.





      Originally Posted by blur View Post

      OK - So I have some more questions on this. I work for a company that uses testimonials A LOT in their marketing. We provide a client a service then the client sends us a testimonial.

      Let's say the client pays full price for the service and they in no way get any benefits from the testimonial, what do we have to disclose? I mean we're dealing with professionals, organizations, and branches of the US Gov.
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    • Originally Posted by blur View Post

      OK - So I have some more questions on this. I work for a company that uses testimonials A LOT in their marketing. We provide a client a service then the client sends us a testimonial.

      Let's say the client pays full price for the service and they in no way get any benefits from the testimonial, what do we have to disclose? I mean we're dealing with professionals, organizations, and branches of the US Gov.
      You don't have the financial side to disclose then. But you still have the other part of the guidelines to deal with and disclose. You either need to be able to back up and show proof that their results are usual and customary OR you need to state that their results are not average and disclose what the average person can expect.

      So if it's a weight-loss product and your testimonial lost 20 lbs in a month you have to disclose that the average customer only loses 2 lbs (if that's the case) which would seriously reduce the impact of the testimonial.

      "Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect."
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  • Profile picture of the author MichaelHiles
    darrin, the problem is that word-of-mouth marketing is based on opinion. It's the most effective form of marketing - and it is usually the result of someone's personal experience with a product, service, or company. In some instances, I have liked a product so much, I have bought stock in a company (Sirius Satellite is one... Apple is one). I preach the virtues of certain products wherever I go, high and low.

    The FTCs decision today essentially blocks my own expression of favor for a product that I regard highly if I don't also disclose the contents of my personal financial portfolio. I refuse to do either... stop talking about products and services that I like and disclosing my personal financial portfolio whenever I make a recommendation.

    According to the FTC, this is against their rules.

    It will make criminals out of millions of people daily without them ever realizing they are breaking the law.
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    • Profile picture of the author darrin_cooper
      Mike,

      I completely agree with you. And there's nothing wrong with word-of-mouth.

      The example I gave was just of a blogger who discloses the relationships. I think the difference is when you represent a COMPANY and generating $120,000 a month, and your blog is focused on reviewing companies/products/services --when it has ADVERSE & SUBSTANTIAL effects on a company based on your statements, there's a big difference.

      There are various different scenarios, all I'm saying is that disclosure is the best policy. But again, it's DIFFERENT, when you are someone with no influence & someone with influence. It's like having the Oprah effect.

      Maybe this is how we need to look at? Ask yourself Do I Have The Oprah Effect? Can your statement, or opinion adversely effect a company largely as a whole? There's so many ways to look at this Mike, and as I stated earlier, its a Framework, put in the hands of people, and going to be executed by the FTC.

      I personally think it's a good thing, as long as you use common sense.
      From a consumer stand point, it's good, cause it will weed out the noise.
      But it all depends on IF & ONLY IF, a large number of consumers are hurt by decisions made by a product owner or product promoter. That's how I look at it.





      Originally Posted by MichaelHiles View Post

      darrin, the problem is that word-of-mouth marketing is based on opinion. It's the most effective form of marketing - and it is usually the result of someone's personal experience with a product, service, or company. In some instances, I have liked a product so much, I have bought stock in a company (Sirius Satellite is one... Apple is one). I preach the virtues of certain products wherever I go, high and low.

      The FTCs decision today essentially blocks my own expression of favor for a product that I regard highly if I don't also disclose the contents of my personal financial portfolio. I refuse to do either... stop talking about products and services that I like and disclosing my personal financial portfolio whenever I make a recommendation.

      According to the FTC, this is against their rules.

      It will make criminals out of millions of people daily without them ever realizing they are breaking the law.
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      • Profile picture of the author MichaelHiles
        We depart in agreement with your belief that this sort of over-reaching, generalized draconian policy enacted by any form of government is a good thing.

        The common sense in question is the common sense that is missing in the brains of the masses, who are incapable of discerning fact beyond a sound byte. Media overload has short circuited the general populace's ability to think in any rational manner.

        Therefore, the government is looked to as the nanny, to protect people wherein ignorance abounds.

        No FTC regulation is going to solve the root of the problem, that problem being the irony of the "information age" spawning quite possibly the most ignorant human beings to grace this planet since Lucy walked across Africa.

        But while we're at it, I want to be able to apply the FTC regulation to bloggers that promote politicians and political agendas that fail. I want full disclosure of bloggers that get money from PACs to promote social reforms and other various policies. That way, when the program ends in complete disaster, all the media outlets that promote these things are held equally liable for their efforts.



        Originally Posted by darrin_cooper View Post

        Mike,

        I completely agree with you. And there's nothing wrong with word-of-mouth.

        The example I gave was just of a blogger who discloses the relationships. I think the difference is when you represent a COMPANY and generating $120,000 a month, and your blog is focused on reviewing companies/products/services --when it has ADVERSE & SUBSTANTIAL effects on a company based on your statements, there's a big difference.

        There are various different scenarios, all I'm saying is that disclosure is the best policy. But again, it's DIFFERENT, when you are someone with no influence & someone with influence. It's like having the Oprah effect.

        Maybe this is how we need to look at? Ask yourself Do I Have The Oprah Effect? Can your statement, or opinion adversely effect a company largely as a whole? There's so many ways to look at this Mike, and as I stated earlier, its a Framework, put in the hands of people, and going to be executed by the FTC.

        I personally think it's a good thing, as long as you use common sense.
        From a consumer stand point, it's good, cause it will weed out the noise.
        But it all depends on IF & ONLY IF, a large number of consumers are hurt by decisions made by a product owner or product promoter. That's how I look at it.
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    • Profile picture of the author David McKee
      Originally Posted by MichaelHiles View Post

      darrin, the problem is that word-of-mouth marketing is based on opinion. It's the most effective form of marketing - and it is usually the result of someone's personal experience with a product, service, or company. In some instances, I have liked a product so much, I have bought stock in a company (Sirius Satellite is one... Apple is one). I preach the virtues of certain products wherever I go, high and low.

      The FTCs decision today essentially blocks my own expression of favor for a product that I regard highly if I don't also disclose the contents of my personal financial portfolio. I refuse to do either... stop talking about products and services that I like and disclosing my personal financial portfolio whenever I make a recommendation.

      According to the FTC, this is against their rules.

      It will make criminals out of millions of people daily without them ever realizing they are breaking the law.
      Agreed - the FTC essentially has run up against the First Amendment and it will be interesting to see how the current crop of gov-mint types will deal with this when the first test case comes to court.

      Frankly, they are trying to regulate opinion. Well, here's an opinion which I take full responsibility for: The FTC is an overreaching and bloated department full of hacks who never ran a business themselves and would not be able to if they tried, but who think they know what you should think and say...

      That's my opinion and I don't intend to back it up - the FTC has done that for me.

      -DTM
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  • Profile picture of the author claytons
    Guys...I think everyone's missing the bigger point here.

    I think disclosure and transparency and requiring "truth" is all lovely...and I'm not afraid of it at all.

    We can all say how we're so great about being ethical marketers etc. We certainly are, we never make false claims, our testimonials are true, and even the pictures are true :-)

    BUT...the bigger concern is that the regulations also talk about holding the advertiser responsible.

    So...what if it becomes too big of a liability for any company to have an affiliate program as they can't possibly police everyone's blogs etc.

    What if...you have a product in the clickbank marketplace and an affiliate breaks the rules...you're the advertiser...are you now liable for the fines too? And while we're at it...is clickbank the advertiser? Could they possibly survive as a company with that potential liability ? Is simply having an affiliate agreement where people swear they won't do this enough to protect advertisers?

    All these questions and more...are what could have the biggest impact...
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    • Profile picture of the author Centimetro
      Originally Posted by claytons View Post

      Guys...I think everyone's missing the bigger point here.

      I think disclosure and transparency and requiring "truth" is all lovely...and I'm not afraid of it at all.

      We can all say how we're so great about being ethical marketers etc. We certainly are, we never make false claims, our testimonials are true, and even the pictures are true :-)

      BUT...the bigger concern is that the regulations also talk about holding the advertiser responsible.

      So...what if it becomes too big of a liability for any company to have an affiliate program as they can't possibly police everyone's blogs etc.

      What if...you have a product in the clickbank marketplace and an affiliate breaks the rules...you're the advertiser...are you now liable for the fines too? And while we're at it...is clickbank the advertiser? Could they possibly survive as a company with that potential liability ? Is simply having an affiliate agreement where people swear they won't do this enough to protect advertisers?

      All these questions and more...are what could have the biggest impact...
      Very good point. Recently we've already seen major companies cut off their affiliate program in certain regions to avoid new taxes. This seems like an even bigger deal
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    • Originally Posted by claytons View Post

      Guys...I think everyone's missing the bigger point here.

      BUT...the bigger concern is that the regulations also talk about holding the advertiser responsible.

      So...what if it becomes too big of a liability for any company to have an affiliate program as they can't possibly police everyone's blogs etc.

      All these questions and more...are what could have the biggest impact...
      Really good point! Not that I think affiliate marketing is going to go away or anything, but merchants and affiliate networks are going to have to carefully stay on top of this, amend their TOS and do more policing or something.
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    • Profile picture of the author David McKee
      Originally Posted by claytons View Post

      Guys...I think everyone's missing the bigger point here.

      I think disclosure and transparency and requiring "truth" is all lovely...and I'm not afraid of it at all.

      We can all say how we're so great about being ethical marketers etc. We certainly are, we never make false claims, our testimonials are true, and even the pictures are true :-)

      BUT...the bigger concern is that the regulations also talk about holding the advertiser responsible.

      So...what if it becomes too big of a liability for any company to have an affiliate program as they can't possibly police everyone's blogs etc.

      What if...you have a product in the clickbank marketplace and an affiliate breaks the rules...you're the advertiser...are you now liable for the fines too? And while we're at it...is clickbank the advertiser? Could they possibly survive as a company with that potential liability ? Is simply having an affiliate agreement where people swear they won't do this enough to protect advertisers?

      All these questions and more...are what could have the biggest impact...
      Like I said - the government destroys everything it touches.

      -DTM

      Read Atlas Shrugged - Because it may be coming to a town near you.
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    • Profile picture of the author Steve Faber
      Originally Posted by claytons View Post

      Guys...I think everyone's missing the bigger point here.

      I think disclosure and transparency and requiring "truth" is all lovely...and I'm not afraid of it at all.

      We can all say how we're so great about being ethical marketers etc. We certainly are, we never make false claims, our testimonials are true, and even the pictures are true :-)

      BUT...the bigger concern is that the regulations also talk about holding the advertiser responsible.

      So...what if it becomes too big of a liability for any company to have an affiliate program as they can't possibly police everyone's blogs etc.

      What if...you have a product in the clickbank marketplace and an affiliate breaks the rules...you're the advertiser...are you now liable for the fines too? And while we're at it...is clickbank the advertiser? Could they possibly survive as a company with that potential liability ? Is simply having an affiliate agreement where people swear they won't do this enough to protect advertisers?

      All these questions and more...are what could have the biggest impact...
      This is so true.I posted on this exact concern when this whole thing came to light a few weeks ago. Companies are very sensitive to liability. This increases their liability, and decreases their ability to mitigate risk. They have only one option; shut down their affiliates, with the exception of a select few, highly vetted affiliates. This could very easily kill the affiliate marketing industry as we know it today.

      The more cynical among us could point to this as yet another way the government is trying to take away a bit more of our liberty and make it more difficult for us to be independent. The more dependent upon them we are the more control they have. All in the name of protecting the people, of course.

      Thankfully, I'm not that cynical......
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  • Profile picture of the author David McKee
    By the Way Darrin Cooper... I love your Avitar! Guy Fawkes for President, or at least let's get him down in the basement of the Whitehouse...
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    • Profile picture of the author darrin_cooper
      Absolutely! I feel very close to the movie! That's how I roll!

      Oh yeah, it looks like that what I've been saying is proving very true.
      And it's only more evident by the day. Health ads on TV & online, have been diminished.
      I'm seeing ads that really & truly reflect the FTC regulations.
      Ads that use to have endorsements with people talking in them, at the end, the ad is clearly stating if that endorser have received or not receive a result, as well as noting if the endorser was paid or not paid.

      Bottom line, here's the rule of thumb, if you do not have an audit trail of the claims made, you are in violation. That goes for United States & anyone product online overseas as well.
      Hate the government all you want, but this is definitely one regulation that actually has substance and great value, if you can see the bigger picture.

      Originally Posted by David McKee View Post

      By the Way Darrin Cooper... I love your Avitar! Guy Fawkes for President, or at least let's get him down in the basement of the Whitehouse...
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