The FTC sued me out of business two years ago yesterday- here is my story

Of course not, they don't have the resources. But if Sugarman did, then he deserves to have action taken against him.

I watch the TV show "Speeders" so, judging by the people on that show, I'd be considered the exception and not the norm. If I were ticketed for jaywalking I wouldn't like it, but I certainly would recognize that I broke the law and deserved the punishment.

I've gotten a speeding ticket before. Hundreds of others were speeding and didn't get pulled over but I did. I deserved the ticket -- the fact that many others got away without one is completely irrelevant.

Hard to say. But if you admit you broke the law, then I guess while it may seem unfair from your POV, it still may have been warranted.

Hi Bob,

You are one of the members that involve directly with this matter. I feel sorry for you and hope the very best of your upcoming business and anything you do in future.

Just want to clarify something - I got this email form one of the top marketer, i thank him for the information given to me and other subscribers too.

They did mentioned something on how to make it works with FTC rules and how we can get out from it.

Here is the email that I get from them:

" Hi nizam,

As you may of heard the FTC has released some new guidelines which
will affect all affiliates working online.

We got many questions about this recent change so we decided to
give you all the facts and answer all your questions in this
newsletter.

What's the short version of what the FTC changes are?
-----------------------------------
The U.S. Federal Trade Commission released their new guidelines on
10/05/2009. You'll find the complete guidelines at
FTC Publishes Final Guides Governing Endorsements, Testimonials.

It's a long read, so let's see if we can summarize the main points
for you quickly:

1) If you have a relationship with someone whose product you're
endorsing (which also means promoting), you must disclose that
relationship. That means you have to say explicitly if you got a
free copy of the product and/or any payment for your endorsement.

2) If you use testimonials to sell a product (yours or someone
else's), you can't use testimonials that give specific results
without also telling readers/viewers what the typical results are.

They'll fine you $11,000 per violation.

There are more details in the guidelines, which we strongly
recommend that you read, but those are the key points. And by the
way, we're not lawyers, so by all means get true legal advice from
a lawyer as you're figuring out how you'll respond to the new
regulations.

Frankly, some parts of the new guidelines are vague. The FTC says
they did that somewhat on purpose, and they'll handle things on a
case by case basis.

That makes it more difficult to know how to comply in certain
situations, because it's hard to figure out how the guidelines
apply, but that's the way it is.

That means there are plenty of unresolved questions, too...and we
won't know the answers until the FTC starts enforcing the
regulations.

The FTC has said that the guidelines are really meant to clarify
things for bloggers and for corporations, but it's easy to see how
they could go after just about any marketer due to the vague
language.

When do the new rules take effect?
-----------------------
They go into effect on December 01, 2009.

They were approved by a unanimous vote (4-0), so there's no chance
they won't go into effect on the scheduled date. This is just
something we'll all have to live with, whether we like it or not.

What about for marketers with businesses outside the U.S.?
---------------------------------------
If you're outside the U.S. and you're not selling to people inside
the U.S., you're not affected at all.

But really, how many web businesses never sell to people in the
U.S.? Not many. It's safer to assume that folks in the States will
buy your stuff, and that you should follow the FTC guidelines.

What does this mean for testimonials on a sales page?
-----------------------------------
We know you've seen testimonials on sales pages that say things
like, "I made $14,576 in 20 minutes with just the tip on page
12!!!" Those are likely to disappear.

It used to be perfectly acceptable to cherry-pick great results
like that and cover yourself with a simple disclaimer like this:

"These results aren't typical." Not anymore.

The guidelines say, "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."

That means if you're going to mention specific results in
testimonials, you have to tell people what the typical results are.

We all know what the typical results are for most information
products... people buy them and do nothing with them. That means
it's nearly impossible for you to quantify a "typical" result. If
you don't know what results at least a statistically significant
sample of buyers got, you can say what's typical!

All of that means (get ready for it) you simply can't use
results-based testimonials. Period. Unless you want to risk an
$11,000 fine each time you get caught.

You can still use testimonials where people say they love your
product, or like you a lot, or generally think you're swell. Those
tend not to be powerful selling tools, but they pass muster.

But that's not all the guidelines mean.

You also have to disclose if your friends wrote your testimonials.

Again, will you get caught if you don't? Probably not, but it's a
risk. Honesty is the best way not to get in trouble.

The best advice is not to depend on testimonials to sell your
product. Make your offer good enough to sell on its own.

In a way, this is bad for new marketers, because it can be tough to
come up with a good offer. But it's also good, because you don't
have to worry as much about getting testimonials!

What does this mean for affiliate marketing?
-----------------------------
It's actually simpler for affiliates than for product sellers.

If you're an affiliate, you have to disclose that you're getting
paid when people buy through your affiliate link.

Yes, that means you need to tell people that your ClickBank link is
indeed a ClickBank link, even if you've made it prettier by saying

"yoursite dot com/productx" or whatever.

There are two ways to do this. The first way is to include a
general statement on your site (maybe in your privacy policy),
something like this:

"Links on this site for product reviews are affiliate links. I get
paid a commission when you buy a product after clicking on one of
those links."

The second way is to be explicit about each link. You might say
something like, "I get paid a commission when you buy through this
link."

Do both approaches cover you legally? Hard to say, and the FTC
hasn't cleared that up yet. So do whichever one you think is safer.

Finally, as an affiliate be VERY careful about using the
promotional email templates product sellers give you.

Those emails often contain claims about results, and the new FTC
guidelines frown on that unless you tell people what the typical
results are.

The new FTC guidelines don't specifically talk about email
marketing, but odds are good this will be considered covered as
well (hey, it's selling). So when in doubt, leave it out.

So what should I do?
-------------
First and foremost, you'll want to get some genuine legal advice,
especially if you have a big site and/or a large mailing list.

Don't just take our word for this stuff.

If you're an affiliate marketer, get busy adding disclosures to the
sites you use to promote products. That includes blogs and review
pages/sites. At a minimum:

1) Add a general disclosure to your site saying that your
promotional links are affiliate links, and that you get paid when
people buy through those links

2) If you offer an free items (front-end sign-up enticements or
bonuses), make sure you tell people that any affiliate links in
those items are getting you paid

Beyond that, it's up to you. When in doubt, disclose more
information than you think you need to. It doesn't pay to get on
the wrong side of the FTC.

If you're a product marketer, you'll probably have more work to do.

Here's a very brief (and probably incomplete) checklist:

1) Start scrubbing your results-based testimonials from your sales
pages. If you actually CAN quantify typical/average results, go
ahead and do that, but most people won't be able to. In fact,
during the comment period on the rules, some folks brought that up
with the FTC, specifically for weight loss products...and the FTC
promptly ignored it.

2) Modify your affiliate email templates (and other things, like
solo ads) to remove any results claims.

3) Contact your affiliates to tell them you did that, and to give
them new stuff they can use instead.

4) Scrub your products of any results claims as well, unless
they're your personal results and you include ALL of your results
(results for every single trial of your free traffic strategy, for
example).

5) If you use any testimonials from people you gave a free copy of
your product to, say so.

Bottom line, disclose, disclose, disclose. Did we mention disclose?

In the end, these new guidelines aren't the death of Internet
marketing, or of affiliate marketing. And if you sell a product on
the web, you aren't out of business.

That said, if you don't want to risk racking up some eye-popping
fines, please take some reasonable steps to comply with the new
guidelines as soon as you can... and as completely as you can,
given that they're a little vague at the moment.

We all have to make changes, unless we just got lucky and were
completely untouched by the new guidelines. That's probably rare.

So make the changes you need to make and get used to the new world.

And look on the bright side. The new guidelines are going to make
it harder for people to sell with hype and false promises. Those
kind of fraudulent sellers hurt everybody by giving Internet
marketing a bad name.

The marketers who can pass muster and sell well even when being
completely honest can still make a killing."
----------------------------------------

Bob, what do you think of that?

I think some of the information given will helps us especially for internet marketers that live outside USA.

Cheers,

Nizam

Steven,

In retrospect, it was a risky business model but it wasn't when I started out. Remember, a bank even invested in my business.

What made it risky were the players that followed me into the business. People looking to make the quick buck and knowing they were pushing the envelope to do so, but not caring.

Think about what I just said.

Is this the same internet marketing arena that you first entered?

I've been in this space a few years and I would say the product launch hype is ten times worse than it was when I started.

I have not seen a sales letter on a big product launch that the FTC would not be able to rip apart in seconds. It has gotten really bad.

The point is, most marketers have nothing to worry about. But I can definitely see a time when the FTC comes after a BIG guru just to make a point and takes down the JV partners with him. It would be too easy. And believe me when I say that they are not shy about throwing everyone and everything into the soup.

I don't want to scare anyone but it is fair to point out that it's not enough for you to keep a low profile. You also need to ask whether the people in your upline are also keeping a low profile.

Now in my case, we had affiliates and they were not touched other than their clients were also caught up in this.

I can't predict what is going to happen but I do suggest to everyone to let that little voice come out and play and ask the right questions. Don't assume.