As Seen On http://www.andrewdesilets.com

Hi,

Thought I would share what I learned from two webinars (one was with the FTC, credit to Jim Edwards, http://www.igottatellyou.com/blog), over the past few days regarding the “New” FTC Regulations.

As well.. this is not legal advice… just my interpretation of what I was able to learn.

To save you the time of reading below, this is the spirit of the regulations:

You must alert the consumer that a financial relationship exists between the endorser (affiliate marketer) and the merchant.

What is enough disclosure? Ask yourself would a reasonable person be able to discern
that the messeage is of commercial intent and this is not a neutral review/endorsement?

The “New” FTC regulations are not new.

The FTC regulations are not new regulations, they are deeper interpretations/articulations of
already existing regulations.

The regulations are not specific to online marketing, but also include television and print.

The regulations can be applied to anyone who has a portion of their business in the US. For example hosting service, domain registrar, merchant site etc…

The Intent Of The FTC Regulations

The intent of the articulated regulations are intended to protect the consumer from misleading and false advertising and false claims.

The FTC Regulations Regarding Disclosure

Websites/Blogs etc.. must contain sufficient disclosure to alert consumers that there is a relationship between the affiliate marketer in the case of endorsements.

What does this mean?

If you have a review site and you are “reviewing” the Wealthy Affilaite. Within your review, you say how great Wealthy Affiliate and recommend anyone interested in learning how to make money online to join up and you provide your affiliate link.

The FTC guidelines require that you disclose (tell) people that the link is an affiliate link and that you will get a commission if the person clicks it and buys a membership.

The FTC does not say where you must put the disclosure, although the requirements are that a “reasonable person would be able to discern that this is a commercial message and not a neutral review”

By that definition, the disclosure presumably should be located after the link and/or at the end of the review and/or within a HIGHLY visible link on your site.

If you endorse a product with no compensation or payment or payment expected in the future, you are not required to disclose.

Short form: Visitors to your site need to know that you will receive compensation if a sale is made through affiliate link so they can make up their own mind when considering the validity of your review.

Real World Scenario:

You have a blog and you review bikes. The bike company provides a samples of the bikes for you to test. You are allowed to keep the bikes after you have tested them.

On your blog, you would be covered if you said:

“I love bikes and so do you. I do these bike reviews to provide you with the best information. If you click on my links on my site and end up buying this bike, the bike company pays me an advertising commission which funds my business and allows me to write more great reviews!

Exemptions:

Obvious advertisements, banner ads etc…

Ask yourself, would a reasonable person know this is an advertisement? If yes, no disclosure is required.

Customer Testimonials And Endorsements

The FTC guidelines in the past provided “safe harbor” to anyone who used the terms “Your Results May Vary” as in this example:

An advertiser uses a testimonial that does not reflect the generally expected results of the users of the product, like “I lost 100 pounds in 90 days using this weight-loss product”

While it may be true, the person did lose the weight, his experience was unique. It was sufficient then to say “Your Results May Vary”

The newly defined guidelines now require you to disclose the typical results.

But how do you know what a typical result is?

You then must disclose what the generally expected result is in the depicted circumstances.

You may also state the results achieved by a random subgroup of users. For example, 1000 people buy a make money online product. 100 random (not top performers )of those people report earnings to you. You must report the average amount of money this subgroup has reported.

… Even in the above example, it would still be hard to get accurate data.

So consider this practical example:

If you have a weight loss product, and you have 10 users who have provided feedback over a 60 day period of using your product with regards to the amount of weight they lost.

Of those 10 users, 3 have lost no weight, 6 have lost 8-12 lbs and one who has lost 100lbs, you would be most accurate to use an testimonial of a user who has lost 10 lbs in the 60 days as it is closest to the truth and is approximately what people can expect to achieve.

If you create a product:

If you are the creator of the product, you can say:

I made $100000 dollars with this method.

Although, you must give an accurate description of what you did and make it CLEAR to others so they understand that the results the achieve are up to them.

Testimonials

- If you pay someone for a testimonial, you must disclose that the person was paid to provide the testimonial.

- If you compensate someone with a free product to for the sake of a review, you should disclose that the product was given to the person (a form of compensation).

Example:

” Bob gave me a copy of his product to try out for 1 month. I have to say, I was impressed with the results I achieved and plan to use his product as resource from now on”

This is an example of a testimonial that discloses the relationship between the person and the merchant.

-Testimonials do not last for ever, for example if you have testimonials from a PPC product from back in 2005, you may not use them now or you must have the person update the testimonial. The FTC did not specify how long a testimonial was good for

What happens if your are not FTC compliant?

While not required, the FTC will most likely contact you via email letting you know that
“we’ve visited your website, we’ve seen “claims” on your website, to make this
claim you have to have “this” kind of evidence supporting the claim. If you don’t then you should take the claim down.”

If you did not comply, the FTC would most likely open a claim against you.

Something to note, The FTC cannot impose civil or monetary penalties against you.

BUT

FTC can take you to court, get an injunction to have your site/advertisement taken down, then have you pay compensation to the victims of your fraudulent claims.

Long and the short…

Don’t lie to people. If you are recommending something to someone and you are getting paid to do so, let them know so they can make up their own mind.

And If you are making outrageous claims that aren’t true you are violating the guidelines and you are a bad person

Des