FTC Changes that Every Membership Site Owner Needs to Know About
On Monday October 5th, 2009, the U.S. Federal Trade Commission (FTC) issued some new rules. They are aimed at "bloggers" (specifically) but also all online marketers in general. The new rules take affect December 1st, 2009. The short version of what they spell out is that: if you receive any sort of compensation in reviewing a product or service online, you must disclose that fact no longer will "individual results may vary" do as a disclaimer. Instead "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."
You can read the actual release here:
http://www.ftc.gov/opa/2009/10/endortest.shtm
...but Wait, There's More...
As much as the full disclosure is going to shake things up, there is another provision that needs to be paid attention to.Both the affiliate AND the company being promoted can be held liable for misleading, false or unsubstantiated claims. In other words, if someone is promoting your product in a way that the FTC doesn't agree with, they and you can be held liable. The fine is $11,000 per instance. The ruling covers other items as well (celebrity endorsements etc). The best summary of this new ruling that I found was done by my friend, Attorney Anne Mitchell. Anne has helped set policy in the past concerning spam and other internet matters. Anne has spelled out 16 different scenarios which explain who would and would not be required to make a disclosure. You are sure to find some clarity in this ruling by taking some time to read this: http://www.theinternetpatrol.com/the-new-ftc-rules-on-bloggers-blogging-testimonials-and-endorsements-explained/
What does this mean for you?
Starting December 1st, if you are receiving some sort of compensation in exchange for a review or recommendation, then according to the FTC you need to disclose that clearly.Your affiliates should be notified that they are not to make false claims or recommendations without clearly disclosing an affiliate relationship as well.
These guidelines are written very broadly. Too broadly in many people's analysis of it. The FTC has stated that they are more concerned about the blatant fraud cases and that any fines would come after a warning to cease and desist. Failure to comply with that warning could result in action against the businesses involved in the matter.
Please leave your thoughts or comments below.
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