Speaking of Those Pesky FTC Guidelines…
Author: Len Thurmond



Seems my Opinionated Report on the FTC’s New Guidelines on Testimonials and Endorsements has rattled a few cages and brought up a lot of questions, as I hoped it would.

First off, you have to realize that their new guidelines are so ambiguous that it’s difficult to even KNOW how they relate to you and me, or our circumstances.

I think it’s obvious to most, that their main objective in all this was to go after the “Flogs”, and dishonest advertising methods that have become all too commonplace lately.

But unfortunately, we as honest and above board business owners have gotten caught in their cross-hairs as well.

This suggests several things to me…

1. If you are honest, don’t result to sensationalism by inflating your claims, and try your best to satisfy your customers so your actions don’t generate a pile of FTC complaints, the likelihood of your getting investigated are very slim!

The FTC is very short handed, and obviously does NOT have the man power to police the 300 million or so websites containing well over 25 BILLION web pages that are in existence today, and growing fast.

So even if they WANTED to find every infraction out there, it would be impossible, and they have openly stated that they are investigating only those sites that have generated enough complaints to warrant tying up their time and resources.

2. If you use the simple strategies available to you, like putting links to a well crafted disclaimer that states your connection with the testimonials on your page (monetary or otherwise), you would probably not get prosecuted, even if they WERE to investigate you.

3. Due to the ambiguousness of their new Guidelines, I believe that they will be tested and revised due to litigation as they go after the Bigger Fish with Deep Pockets that will undoubtedly test the waters in court.

Their Guidelines just leave TOO much to the imagination. Too many unanswered questions, that I believe WILL be answered in the course of time, as they are tested.

I received an email this morning from a customer who posed a very good question, and I quote …

“if I am an affiliate selling a product, and I am using sales materials from the product owner, then how would I know anything about the people represented in the sales material, who are offering testimonials, since I am just using the sales material provided by the owner of the product. Is it only the product owners responsibility to make sure the sales material complies with these updated guidelines, or can I also get in trouble using the sales aids, if they do not comply?

This is an interesting question, because it directly addresses the ambiguity of the guidelines in that, although I do not believe they WOULD come after her, according the Guidelines as presented today…they COULD!

They give a lot of examples in the Guidelines to try and clarify their intentions. Examples that in most cases bring up MORE questions than they answer.

One such example is of about the responsibilities of actors in the advertisements they are paid to do.

The FTC basically says (and I’m paraphrasing here) that if actors enter into contracts to create advertisements, and if the scripts they are reading makes it appear that they are personally endorsing the product, it is their responsibility to know whether or not the advertisement is making false claims, or to hire someone to make sure the claims are “TYPICAL” before taking the contract.

Otherwise, they could be held liable.

To me this would be much the same as an affiliate promoting the products of someone else with sales materials that THEY created.

As with the actor, an affiliate has NO control over whether the claims on the product sales page (or in the testimonials), are true or typical. So according to the way I read the Guidelines, the responsibility to determine the validity of those claims would then fall on the Affiliate. Who would then have to decide whether or not to promote the product.

If they chose to promote, and the claims were false, then they, as well as the product owner could be held liable for false advertising and prosecuted by the FTC!

And what about the Copywriter who is hired to write the sales pages of the script? Could he be held liable for writing copy from the false facts that were given to him by the product owner?

So you see, these “Guidelines” open up a HUGE can of worms, and it’s gonna take a while for the worms to all crawl out of that can!

But I TRULY don’t believe that we are in nearly as much danger as all the Sensationalist “Fear Mongers” would have us believe.

The head of the FTC department that is covering these Guidelines has openly stated that the $11,000 fines mentioned, and even litigation would be a “Worst Case Scenario” as first they would issue a warning giving you the chance to comply, and only after repeated infractions and refusal to make changes, would they prosecute.

So unless you’re already on their “Sh*t” list, or treat your customers so baldy that you generate a boatload of complaints, you probably don’t have much to worry about.

But that doesn’t mean we shouldn’t TRY to comply as best we can by using disclaimers where possible. It is always better to ere on the side of caution than to punch the bull in the nose!

And I am also concerned that there will be those who will become aware of these new Rules and Regs and take it upon themselves to file complaints out of some deranged feeling of doing their part to clean up this MESS!

And don’t forget about our competitors who might see it as an opportunity to nip the Competition in the bud!

Anyway you look at it, Big Brother has once again stirred up a Hornets Nest, and I think we’ll be hearing about it for some time to come.

But I wouldn’t lose any sleep over it.

Just be honest, don’t use shady sensationalism tactics, take care of your customers, and use the documents you have available to you, like Terms of Service, Privacy Policies, and Statements of compensation and affiliation, and you should be fine ;o_

And here’s my shameless plug…You can get ALL of those at…

http://www.AutoWebLaw.com

Here’s to Your Contiued Success,

Len Thurmond

Len Thurmond

PS – The Information in the preceeding article is comprised of the personal “OPINIONS” of Len Thurmond, and should be considered as nothing more…nothing less.

Nothing in this article should be considered as Legal Advice in any way, shape or form.

As always, you should seek the advice of your own attorney before making up your mind about what course of action is best for you and your situation.




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Len Thurmond has been marketing on the Internet since 1995, and is one of the best known authors and newsletter publishers in the Internet World Today.

Through his highly acclaimed Newsletter, his many Seminar and Tele-seminars speaking engagements, and his coaching programs, he has helped thousands of now successful Entrepreneurs find their niche, and make it profitable.

To read more of Len’s Marketing Articles visit his blog at http://LenThurmond.com

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This entry was posted on Monday, October 19th, 2009 at 6:08 am and is filed under Article Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

5 Comments so far


  1. Michele on November 8, 2009 5:29 pm

    I have AutoWebLaw and saw the new disclosure documents. I was wondering if an affiliate using a pen name can use the pen name in the disclosure document.

    I know a lot of affiliates get into different niches and use different pen names for each niche. They must use their real names when signing up with affiliate programs, though.

    If you have to use your real name in the disclosure doesn’t that make it easy for competitors to search your name and find out your niches?

    Could we make the disclosure an image like jpg so no searches can be done?

    Sorry for the length of this but I would think others are wondering the same things.

    Thank you.

  2. Len on November 9, 2009 6:01 am

    Unless your pen name is registered as an alias or DBA, I would think it is not legal. However, I think using an image flle might be ok especially with an alt tag

    Len

  3. Linda Starr on March 15, 2010 2:15 am

    Re: the above email from your customer and her question about affiliates using sales materials with testimonials from a product owner…

    Dave Guindon (one of the best IMers around in my experience) recently sold a PLR product with prepared sales copy for his affiliates. New Clickbank rules compelled him to remove all his own testimonials with instructions that affiliates could provide their own testimonials if/when they acquired them. That solves the FTC issue from what I understand.

  4. Linda Starr on March 15, 2010 3:39 am

    PS: I just red the report and I have one question: What if you created an autoresponder email that contained endorsements and put a link on a sales page telling anyone who was interested that they could see endorsements via email if they clicked on the link? Since it would not be on the sales page would it still cause any potential legal problems?

  5. Len on March 15, 2010 10:18 am

    Hey Linda,

    Unfortunately, the same rule apply to email as to web pages. Be VERY carefu about how you use testimonials!

    Len

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