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Author Topic: How Will The Recent FTC Guidelines Affect You?  (Read 2699 times)

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Offline Ken Nwankwo

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How Will The Recent FTC Guidelines Affect You?
« on: October 13, 2009, 10:17:55 PM »
Hello Gurus,

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
http://www.ftc.gov/opa/2009/10/endortest.shtm.

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.

-------------
Ken Nwankwo
Admin
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Offline realsbd

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Re: How Will The Recent FTC Guidelines Affect You?
« Reply #1 on: October 21, 2009, 03:27:40 PM »
Hello guru,
   I really appreciate what youve just posted and to be candid with you i have never heard of such  laws and i am very glad to see that things are changing for better,
  All this while l am always angry when i come accross websites saying that they will teach you how to make 10000usd daily how could a business world larger than forex be so hard to find, the answer is simple there is no other market which is larger than forex, so how could someone be giving figures which such person have never make in reality, thats just like a fruad.

i will definitely take my time to go through the policy very well

sorry don't mind my words, i was about to leave the system alone when i came accross this thread.
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Offline Ken Nwankwo

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Re: How Will The Recent FTC Guidelines Affect You?
« Reply #2 on: October 30, 2009, 07:02:39 PM »
Hello guru,
   I really appreciate what youve just posted and to be candid with you i have never heard of such  laws and i am very glad to see that things are changing for better,
  All this while l am always angry when i come accross websites saying that they will teach you how to make 10000usd daily how could a business world larger than forex be so hard to find, the answer is simple there is no other market which is larger than forex, so how could someone be giving figures which such person have never make in reality, thats just like a fruad.

i will definitely take my time to go through the policy very well

sorry don't mind my words, i was about to leave the system alone when i came accross this thread.

That is it

The laws in the US will help a lot.

-------------
Ken Nwankwo

Admin
http://GurusForum.com
Top Notch Sites For MONEY Making:
www.KenNwankwo.com
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Offline MARTINANZEKWUE

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Re: How Will The Recent FTC Guidelines Affect You?
« Reply #3 on: December 18, 2010, 05:56:42 PM »
it good

Offline wealthpark

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Re: How Will The Recent FTC Guidelines Affect You?
« Reply #4 on: December 21, 2010, 06:18:06 PM »
Thanks man.

Offline andy4real

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Offline abiodun02

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Re: How Will The Recent FTC Guidelines Affect You?
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