FTC Guidelines for Product Creators and Their Affiliates

Hi nuneybopper,

Here are 2 important articles to read that answer most of your questions about advertisers being held accountable, what you should do and how enforcement will be handled. Also the FTC says they will not be issuing fines (but I think they still could if they want to.)

FTC Responds to Blogger Fears: "That $11,000 Fine Is Not True"
In one part they talk about enforcement and in another the fact that they are going after advertisers more than bloggers/marketers.

New FTC Rules for Testimonials and Endorsements in Marketing
Joel Comm's attorney weigh in on his interpretation and makes suggestions for affiliates and merchants/product owners.

This could be a big hassle for the affiliates. I have several blogs with hundreds of posts containing affiliate links. Would I be required to add the disclusure to every single post?

And I assume this also applies to Adsense?

Would like to know what everyone is doing about this.

Hi Warriors!

I agree with 5star, I think a link to a disclosure page will be alright. In fact I just recently bumped into a blog of an internet marketer who's done just that. So I guess it will work out fine.

All Success!

Omar

Here's a very informative report I found, which does contain quite alarming information many may not be aware of: FTC New Compensation Disclosure Requirements: Free Internet Marketing Special Report : Internet Law and Business Blog

I've already remedied this. On the front of all my products is a picture of me in my cardboard box house. That makes it very difficult for my affiliates to inflate claims much.

You know, at this time I have 0 love for the US government and if the FTC isn't going to give out fines then my take on it is "who cares!" I mean I am sick of someone trying to control how I make an honest living. If my ways aren't deceptive then leave me alone! This includes the great Uncle Sam who is thinking they need to control every aspect of our lives here in America.

This country was started to get away from control! It was started because people wanted to be free. Now look at us! You can't even have a legit business without our b.s. government looking over your shoulder and threatening you! I am so frickin sick of it!

I do not give a rats *** about the FTC! They suck and are not really even for the consumer! If I need to move out of this country just to have an online business whether it be as an affiliate or a merchant, then so be it, but I will not be controlled by this communistic government anymore!

Well said, Steve...although I'm sure they could think of a loophole to still mess with you no matter where you live. For example, since with an Internet business you are most likely doing business with citizens in the USA, you could still be "subject to" regulations. But as long as you don't stick out too much, regardless of how on par you are with their version of ethics, you should be fine. They like to make examples of a select few who fit their profile, in order to generate publicity, among other things. Fortunately for us (Internet marketers), even those who make 7 or 8 figures a year probably won't even get on their radar.

Thanks for the resources, Linda.

So if you are selling a product on Clickbank and say an affiliate makes ridiculous claims about your products and gets caught, what are the consequences here? I mean as a merchant how can you control affiliates signing up on Clickbank. I would be interested in knowing what needs to be done.

So does someone have a system in place to ask affiliates to sign up before allowing them to market your product. If you are a Clickbank merchant, what are the options?

There are tons of ways that many are doing that (requiring affiliates to sign up before promoting). Simply don't have your affiliate resources page link available publicly. Instead, have an autoresponder signup form which redirects to it. That way, you can disseminate the information automatically via email, and on your site too, obviously.

I understand what you mean if people find your product in the ClickBank marketplace and generate a hoplink that way - but I know many product launches (such as Commission Blueprint 2.0) had private JV partners who had to prove themselves before even being able to promote the product, and if an "outsider" promoted it and made sales, they wouldn't have even qualified for commissions. I don't know what technology they used though.

This is one of the BIG reasons why it's somewhat hard to get accepted in the CPA networks as an affiliate. They want to make sure your on the up and up and don't cause any ****.

Looks like a product owner is going to have to be more selective in choosing affiliates instead of the open Smörgåsbord currently in effect for the majority of products.

Mike Hill

I think someone should release a comprehensive product covering all of the changes, and what to do about them; key word: comprehensive, lol. Not a small report that scratches the surface.

I was looking forward to marketing online, until I saw the FTC ruling, looks like I will not be marketing online soon, I will have to get a lawyer, if I make one mistake without understanding the rule, then I am slap with $11,000 fine. It's like no second chances here ouch

Anyone know how you're supposed to comply with these new FTC guidelines if you're advertising on Twitter, Adwords, banners, etc where you have a limited space or a limited amount of characters. Google Adwords only gives you two lines or 70 characters, Twitter 140 characters and there's not enough space to insert a disclaimer that you're an affiliate who is getting paid.

*sighs*

Maybe I should have gotten into the banking industry instead.

Doesn't seem to be much regulation there.

FTC can kiss it ... Who care's - They will not run my business nor tell me how to live my life. All of my sites have always had terms, privacy, disclaimers, and etc...

Great Post Steve - Fully Agree!

James

I THINK ( my opinion ) as long as you have a disclamier you should be fine. Also I learnt a trick from Frank just say "80% off the buyers will not make any money" thats a fact remember the 80 20 rule, and your covered.

Maybe I should get all these little courses on the subject and create a full-blown quality one - without plagiarizing of course. I could even get some interviews with the feds, aha.

Hm...so has anyone heard of the FTC going after anyone yet since the law became official?

Anyone? It would be strange if they were "small-fry" and not someone popular, at least as of yet.

Here's a good "official" link: Advertising and Marketing on the Internet: Rules of the Road

I appreciate the contribution of posts to this topic. I know no one wants to be the test legal case to get slapped with legal action from the ftc. regarding affiliate marketing.

Although the ftc new guidelines regarding affiliate marketing have been enacted I really did not get a clear example from them on how to go about it. I have personally updated my disclaimer and terms of use pages to include the fact that the websites I publish and have a link back to my disclaimer page states that affiliate ads and offers may appear on the site and that commissions or payments are received that may cover advertising costs involved and for making the visitor aware of some information that may help them.
Has anyone used a similar approach? Will these action suffice?

cheers

when I 1st heard of the new FTC rules, I was irrate. Right now, after some rethinking...

I'm still irrate, but at the same time nonchalant...

because I know I'm not doing anything wrong. (okay so maybe the only wrong I'm doing is that I don't tell anyone about commissions... but I'll change that, and once I do, I'm clean.)

wait...

You mean I actually have to tell my subscribers whenever I make commissions because one of them made a purchase?

And how on earth do I write a disclaimer? I can't afford a lawyer. I'd probably have to write one myself...

I have been in payment processing for more than 20 yrs and have always specialized in what the industry views as the 'high risk niche': biz opps, franchise, weight loss, mlm, ecommerce, etc.

Part of the due diligence of approving these merchants was an overview of their advertising for FTC compliance - and what the FTC is now enforcing online is really nothing more than what other industries have been dealing with for years.

Ever notice the little line at the bottom of the ad (print and tv) for all of the weight loss comemrcials that says something like "these results are not typical, yada, yada, yada"? Ever go to a franchise or business opportunity show and see the disclaimers on all of the printed material advising you that there are no guarantees that you will make as much money as the people in the video?

The point is that in many industries, disclosure of paid endorsements have been required for quite awhile, as have income disclaimers, and so it's really nothing new, it's just been extended to cover online marketing as well because it has gotten so out of hand (thank all of the floggers for that one!)

One of the biggest things to be aware of is using testimonials: Using testimonials is fine - but if you really want to be covered in case you are questioned, do what the biz opp, franchise market, weight loss and MLM companies have to do: keep the name and contact details of the person that has offered the testimonial on file. In this way, if anyone ever questions the validity of the testimonial, you are covered. And trust me - in past cases, this has indeed been a big issue, due to the fact that testimonials often have claims of income generation from using the product. So - if you use something like this - make sure you document everything that you can before you post it online!

If you are an affiliate and have been using information from the company's website - make sure that they have the proper documentation to back up any testimonials on their website before you use them. If you DO use testimonials - make sure they are used EXACTLY as they were originally posted - do not take a line out of this one and a line out the another one to create "original" content for your site (I mention this because a recent WSO suggested doing this - BAD TACTIC!).

The bottom line is that as a small blogger you probably won't have anyone knocking on your door - but if they do, it's going to be expensive. I have personally known MANY people that have run afoul of advertising regs, not just the FTC but also the AG offices - and even if nothing actually comes of it, because you have things to back up your ads - it's still a nasty and usually expensive process.

The problem is not spinelessness - it's the fact that there are always a few jerks out there that are intent on ripping people off rather than making money by offering a legitimate service or product, people complain, and so new regs get enforced.

Unfortunately - it's kinda like gun control - it only stops the law abiding folks.

Just my 2¢ but it does come from a couple of decades of compliance with pretty much the same issues in the offline world.

Melody

P.S. Happy Holidays, Everyone!!

Yeah that's true. But right now, as an affiliate, does this mean that I also have to email the product owners and merchants and ask them if they comply with the FTC rules? I mean, imagine those affiliates who promote many different merchants! And imagine those affiliates who have many blog entries promoting many different products. That's gonna be a troublesome task, editting hundreds (or thousands) of blog entries and headlines and websites...

I think it'd be cool for one of the big $$$ IM guys to write maybe an eBook or something tackling how affiliates should best handle these new FTC guidelines. I'm talking "TESTED" methods of disclosure placements and wording. Not only would it be financially beneficial, but it would make for an extremely interesting learn. Just an idea.

It seems to me that many people are under the impression that the new disclaimer regulations only force you to say "results not typical", but I am fairly certain this is not the case. My research indicates that you actually have to display a "typical result" and in many cases this is simply not possible. For example, I saw a new product launch that mentioned this new regulation and how since no one had bought and tried the new product yet, the typical result is nothing at all. I was relieved at its honesty, despite the fact that some people could make a fortune from it.

As for compensation disclosure, if you offer a bonus in your affiliate promotions, this shouldn't be trouble at all. You can just say that since you are receiving compensation for them buying through your link, they get something extra from you. You can weave it into the conversation seamlessly.

I'm glad that people have benefited from me starting this thread. Hopefully it will save some of them a good deal of fines if they were at risk.

Oh, another extremely important issue I haven't seen covered that well is what I mentioned in the beginning. I read a recent Frank Kern interview how he doesn't even recruit affiliates at all for his ClickBank products because he doesn't want to be liable for their actions - which you can be if you have your own affiliates. If anyone has ideas for how to effectively communicate with your affiliates and enforce compliance, this would be beneficial to the community as well. It's more complex than simply sending out an email to your affiliate list (if you have them subscribed to a newsletter) and letting them know. You'll actually have to keep tabs on them, which needless to say is a daunting task. Maybe someone could invent some type of software to partially automate this process. No idea how you would though, being that you'd have to monitor the precise wording of postings all over the Internet, not to mention private newsletters...