FTC Prosecution of Affiliates for Advertising Claims – Affiliate Summit West 2011

One of the last sessions of Affiliate Summit West 2011 in Las Vegas was also one of the most interesting. FTC Prosecution of Affiliates for Advertising Claims was presented by A. Jeff Ifrah, the founding partner of Ifrah Law. In the past few years, the Federal Trade Commission (FTC) has been cracking down on affiliates over deceptive trade and advertising practices. As an affiliate, it’s to your advantage to learn the new FTC rules and takes step to ensure you don’t get a knock on your door.

Jeff’s presentation was broken down in to four parts.

  • Insider’s understanding of the FTC
  • Real-life examples and what they mean to you
  • Staying out of the government’s cross-hair
  • Critical advice “in the event…”

The new FTC rules changes the guideline for disclaimers. In a nutshell, having a disclaimers no longer protects you from the FTC cracking down on your ass. The rules also change disclosure rules. As a blogger, it’s important to disclose if you were paid for a blog post, whether in cash or gifts.

The FTC has the power of issue a “Temporary Restraining Order.” The TRO allows to FTC to freeze all your assets even before they prove their case. This gives them tremendous leverage to get you to settle. Often time, you will read news story of a complaint and settlement done all in one day. This is because of the TRO instantly puts you out of business. It’s a situation where you are assumed guilty until proven otherwise.

The main take away I got from Jeff’s presentation was if you get a request from the FTC for more information (CIV), don’t send it until you see a lawyer first. In most cases, what ends up happening is you end up helping the government built a case against you. You still need to respond to the CIV but a lawyer can help you narrow the focus of the complaint or even dismiss it.

ASW Session

ASW Session

ASW Session

ASW Session


45 thoughts on “FTC Prosecution of Affiliates for Advertising Claims – Affiliate Summit West 2011”

  1. Dino says:

    Wow thats some serious business… better keep my landers clean from now on…. πŸ˜‰

    1. now bloggers are also on the radar of govt.

      They should keep it very much simple and easy to understand.

      1. dotCOMreport says:

        It is mostly a matter of reading the new rules and applying it. Then again, if there’s a blog post simplifying things for new bloggers, I’m sure that would help.

        1. Write a disclaimer on your blog that you get paid for what you do and don’t write false testimonials, that’s about all there is to it.

          1. Let me clarify that, a general disclaimer on your BLOG should protect you on your blog only, but not if you do ppc or some other kind of advertising and use false testimonials or other misleading ways to get people to buy.

          2. Hey John,

            It seems that the lawyers always get a piece of the pie no matter what. Are we now having the French law of guilty until proven otherwise?

            I like to believe that everything is done to protect the consumer.

          3. Thanks to the FTC they have made themselves the law. No legislation any longer, they make the rules and you follow.

  2. Jason says:

    New to blogging…

    You stated “it’s important to disclose if you were paid for a blog post, whether in cash or gifts.”

    Paid meaning that you could possibly profit form a post with an affiliate link attached?

    Would these be on every post or in general at the bottom of each web page?

    1. john would love to know your answer on it.

      1. PPC Ian says:

        I would like to know as well. John, very informative post, thanks for sharing. It’s so important these days keeping up with FTC rules.

    2. A general disclosure on your blog is good enough for your entire blog and every post in it.

  3. Abhik says:

    The thing gone over my head..
    How this going to affect bloggers like us? If we don’t disclose a paid post, how they gonna find it?

    1. John Chow says:

      THey read you blog, find a post where they think you got pay for doing it but didn’t disclose that. Then they will find you. It’s not that hard.

      1. Is that applies to bloggers from all over the world or is it only for bloggers from US ?

        And its not that easy to find if the post is sponsored or not.

      2. Abhik says:

        That’s absurd!!
        What is case I am writing a review for a commercial product? I gotta add links to them.

        Silly..

        1. That’s life with an more and more intrusive government. Why do you think they keep finding new ways of taxing us? They need more money to keep running scams such as this.

      3. Abhik says:

        Also, does that mean we have to mark all the posts with.. “Not Paid” or “Paid”?

    2. onus to prove will be on you.

      So ball will be on your court.

      1. Abhik says:

        huh!!?
        That’ll be unnecessary harassment to the bloggers.

        1. They’ll go after those who make big bucks first.

          Just do what they want and don’t waste energy on getting upset about it.

          They have all the power and will keep hiring more people to have even more of it.

  4. d3so says:

    Very interesting. I need to update disclaimers on my sites to comply πŸ˜‰
    this is something affiliates shouldn’t ignore.

    1. Andrew says:

      Are you stupid? Did you even read the article? (Oh wait, I see… You’re one of the spammy Top Commentators. It’s clear you didn’t read the article)

      Right in the article (if you were actually reading it), one of the main takeaways is:

      “In a nutshell, having a disclaimers no longer protects you from the FTC cracking down on your ass.”

      How about you read the article instead of being so concerned with getting your commentator count up?

      1. d3so says:

        lol you make me laugh, ass wipe…

        1. Andrew says:

          I am glad I humor you. You are real mature… but then again what was I expecting? Your gravatar looks like you are 12. I am actually surprised you even read my comment. Hey buddy, you can reply to this one and get your commentator count up even more! Dooo it!

    2. Yes we should not ignore any kind of statutory updates or warning.

  5. Juan says:

    Jesus Christ! Its more serious then I thought. I understand crackin down on ppl practicing black-hat marketing etc. i.e. false testimonials & reviews. (Always Use Real Testimonials & reviews) Being real and truthful is genuine.

  6. Seems that the cost of doing business online is going up. I maybe wrong in this but what happened to innocent until proven guilty ? Anyone have a sample disclaimer that complies with the new FTC ruling ?

    Thanks you.

  7. iheater says:

    Hi,

    Shit. This is damn serious. False testimonials. Wonder if I come clean now.

  8. Alex Neill says:

    Wow thats kinda scary! Freezing all your assets before they even prove their case! Need to shift my money to another bank account ha ha. Alex

  9. fas says:

    The FTC wont let me be me, so let me see.

    The new FTC rules are so crazy.
    !

    1. Neon SRT4 says:

      I disagree with you. The FTC Rules are Perfect, Because they are meant for false advertising claims.

  10. Are serious..this is some crap..the government just want more money from the people..all the crap we have wrong in the usa..you want to come after some internet marketers..think about it

    “Black Seo Guy “Signing Off”

  11. bryan says:

    So is it possible to have everything setup “offshore” websites and LP’s setup and hosted out of the states, yet still being a US citizen. Im curious if there is a way to not subject yourself the the FTC which is pretty much a pain in the but.

  12. Just wondering if this goes for Canadians as much as it does Americans. I know John is Canadian, but it’s just that our government seems more lenient. But who knows! That’s some scary stuff. I’m glad I barely scrap together $50 a year off my site! Haha

  13. Matthew Loop says:

    Very timely post. Hopefully, many will heed the warnings and advice.

  14. Have to worry or not ?
    Just justify this question please.

    1. No, you don’t have to worry as long as you follow the rules, regardless of how intrusive they are.

  15. John Alves says:

    I think it all comes down to treating your customers correctly and not trying to be sneaky when selling products. If you are running a business properly and fully disclosing who you are and what you do, then there shouldn’t be any problems. The affiliate compensation disclosure was a big step by the FTC, and they will continue to look for marketers that are being shady online with their practices.

  16. A TRO does not mean they will freeze your assets, it just means they want you to stop doing what they’re accusing you of and if you don’t stop, you are in a heap of trouble.

  17. Jeff Ifrah says:

    John,

    Thanks for posting my recent presentation. I can see from the comments that folks are looking for some guidance on recent FTC enforcement activity in the paid blogging and social media space. There have been two recent cases that fit the bill. I will post a summary of each on our blog http://www.FTCBeat.com on Tuesday and Thursday next week.

    Enjoy the long weekend!

    Jeff

  18. Top affiliate summit, wish I could go.

  19. Dan Lew says:

    Wow, affiliates paid to go to affiliate summit to listen to that, how boring πŸ™‚

  20. Thank you for posting this. I will take heed and get more familiar with what we can and more important CAN’T do or say. Also, nice meeting you John.

  21. I think that all bloggers should be ethical when promoting products, but the government needs to butt out.

    It isn’t fair we have some many requirements thrusted on us. Doctors and others refer people all the time and get money in the process. They should have to give us a disclosure too (according to the FTC).

  22. Neon SRT4 says:

    Thank you FTC, and thanks for the Post. You have made a rule, and we will follow it.

Comments are closed.