Mathews, VA (PRWEB) December 3, 2009
The FTC recently provided an online, in-depth interview examining the Internet applications of recent changes / additions to the FTC Act with Jim Edwards of Guaranteed Response Marketing, LLC. The expanded interpretation of the regulations goes into effect December 1, so every marketer and advertiser conducting business online will benefit from seeing this interview, not only to ensure compliance, but to eliminate rampant confusion about the changes.
Richard Cleland, assistant director of the FTC advertising practices division, specializing in health claims and health product marketing, participated in this extensive interview. Cleland first refers to the regulation: “The original FTC act ‘prohibits deceptive and unfair acts or practices in commerce and misleading advertising of drugs, foods, cosmetics devices and services,’ and these prohibitions apply online and offline.” The additional guidelines provide expanded interpretation on how these prohibitions apply to online marketers, bloggers and affiliates. With the dramatic increase in the number of bloggers and affiliates promoting and selling products online in recent years, “The Internet makes everyone a national advertiser — an international advertiser,” stresses Cleland.
The interview includes real life examples of online advertising and the requirements regarding affiliate disclosures and testimonials, on which Cleland comments whether they comply or violate the spirit of the regulations. Disclosure of compensated affiliates must be clearly stated on any website. According to Cleland, “Transparency is the spirit of the regulation.”
Edwards says, “Rich Cleland helps unveil the mystery and misconceptions about online advertising … Every single Internet marketer, blogger or affiliate should watch and listen to the webinar and learn how the industry can work with the regulators to ensure standards are upheld.”
The issue of affiliate marketing is broader than endorsements and raises additional concerns. Edwards describes recent fraudulent activities as “socially engineered.” The ‘Mommy blogs’ inadvertently prompted the attention of the FTC to online endorsements, as thousands of bloggers were reviewing and recommending products and services while not disclosing their affiliations “Many of these blogs were complete shams with fake posts and fake responses, ruining the whole honesty and transparency of social media,” Edwards notes. “If you are receiving free merchandise (and expect to receive more in the future) and the author is giving a positive review of the product, then, yes that blogger would be subject to the regulation. It’s about consumer protection,” Cleland asserts in the interview.
Regarding testimonials, Cleland states “The requirement here is to disclose what the generally expected results are in the depicted circumstances.” The days are long gone for customer testimonials citing “results may vary” or “results not typical.” According to Cleland, the FTC aims to protect consumer sovereignty and prevent damage to any consumer physically, financially or mentally. The FTC discourages an affiliate from making unsubstantiated representations about a product, especially in instances when the consumer’s health or finances may be at risk.
Though some bloggers may claim they have a First Amendment right to say what they want under the guise of “social media,” Cleland asserts that they “do not have a First Amendment right to mislead in a commercial context.” The FTC does not have authority to exact civil monetary penalties for violations of these guidelines. They can, however, conduct an investigation when fraudulent activity is suspected, which could result in severe legal consequences.
The Jim Edwards FTC Interview can be viewed in its entirety at: http://www.igottatellyou.com/blog/ftc-change-interview/
For questions about the recent changes, contact the FTC via email at endorsements(at)ftc.gov.