New FTC rules on testimonials and endorsements??

The other thing I read a blogger say is that CB would be less of a target simply because they give cast iron money back guarantees so a customer cannot get ripped off because they can always get a refund.

 

True.

I have to believe that the "re-bill" industry was the main reason for the FTC rules.

 

Ya Rolf. I got news back, but waiting on more until implementation before the deadline.

The new rules actually have lots of issues that can affect an affiliate as well as vendors. But it seems that the FTC will do nothing more to low level affiliates besides warn them. If an affiliate does not follow suit, the FTC can bring them to court. But the FTC does not have the legal right to set penalties. The courts do..

The vendors need to watch out mostly.. And there definitely needs to be changes in most vendors sites to "Fully Comply".

There are gray areas and such, but basically, you can no longer say "You can make $4321 a Month Using our product". If you are the product owner, every claim you make needs to be truth and represent what the average outcomes are.

It seems like testimonials that compliment your customer service and ease or ordering are fine. but those highlight ones that make those astonishing claims have to be modified or removed.

The ** way is probably not sufficient to satisfy the FTC rules with 100% compliance. And the examples shown certainly have some flaws that could leave them vulnerable.

As the FTC spokesperson put it, there are people behind the line, people teetering on the line, and people who are blatantly over the line. They will go after the ones that are over the line. Small offenders or people teetering on the line may be warned. But they can go after large offenders without warning.

The ultimate conclusion is that each testimonial and claim will have to be scrutinized to ensure it is not misleading or hiding information. If so, it needs to be disclosed. If the information is bordering on a LIE, it needs to be removed or edited.

This sux for the IM niche the most. Not only are there these new laws, there are also state and federal laws that come into play when one claims monetary earnings, and the FTC said, without hesitation, that the IM niche and the Health Niche are the most vulnerable.

Here is the link to a LONG video interview with a spokesperson from the FTC. Clickbank is specifically mentioned and it goes in to great detail on affiliate marketers and vendors. http://jimedwards.s3.amazonaws.com/ftc-advertising-interview/index.html

So, that's what we decided to do. Go through everything to make sure we have reasonable arguments for every claim. If a claim does not represent "Typical" results, it needs to be modified or disclosed.

I suppose there is some "Wiggle Room". It depends on how close to the line you want to get.

 

I am a vendor and I just finished creating my new website and launched it a couple weeks ago. The truth is that I actually didn't hear about the new FTC rules until after I launched. But, I left my testimonials the same.

I think they are alright because all any of them say is that the system is great. I mean, I hope the FTC wouldn't want me to say otherwise. "Hey I loved your system" (your results may vary, you may not love it)

lol, but I have been selling fine without having to mention member's making specific amounts. The whole website is themed about Rick Thomas making 30,000 and showing you what he did.

What do you think? Do you think I am alright?

P.S. I have a really really good idea to beat the FTC thing .. I just don't know if I should say anything because I don't think anybody will do this. But I know after I did that others would imitate.

 

Thanks floodrod. I have heard similar to what you mention, requiring a lot of sudden and ongoing work to find out more about the situation of the person giving the testimonial and to keep them up to date. The required details are almost impossible to obtain from the customer unless they have all day or you compensate them for their time.

It's quite a burden and not something I've seen any CB vendor do yet which has surprised me.

And yet others think that using an asterisk is fine to comply with the law, and FTC have given some indication of this elsewhere (not specifically the asterisk, but making use of it).

So bloody confusing!

I would really like to see more leadership on this from CB themselves, instead of just forcing to accept some new clauses in the agreement. There's no way that they are 100% protected from this so that's why I am surprised by their (lack of) action.

 

Having watched Jim's video, seems like the asterisk is not a viable option. FTC never mention it at all as a suggestion. The best thing is to take out completely any specific results mentioned in testimonials that are extreme or outliers.

FTC are big on what they call "typicality". If your testimonials are ALL amazing, they'll have a problem with it. Take out the specifics and they won't.

This means cutting down the testimonials to just those that are closer to the average. References to specific results that are particularly better than average (this is many people's testimonials) should be removed.

The other option is just to leave everything as it is. FTC usually (but not always) send you a letter/email first and you can then make changes to your pages to comply. But they don't always do that.

I'm definitely going to be taking some action.

 

Glad you watched the video. I also watched them in full.. I found there are also several problems in my pitch pages that also need to be addressed.

I have no idea how there magnetic power websites are going to meet the disclosure rules when probably none of their customers successfully built a magnet motor. And it seems that a few sentences buried on the footer will not hold water anymore.

And as you pointed our ROLF, the FTC wants the testimonials to be updated to reflect current data.

I'm gonna watch JIM (the interviewer himself). He has these 2 domains.. Both are registered to him.

http://www.minisitecreator.com
http://www.minisitecreator2.com/special.html EDITED

notice in the spin-off domain, the testimonials are on the left..
Now take at look at the first link.. No testimonials, same layout..

I have a feeling JIM knew the testimonials infringed every rule, so he totally ripped them down.. Maybe he's repairing them or asking for new ones.. Maybe he has no idea.. But I have good reason to believe JIM is going to do everything he can to fix the errors. Remember, JIM actually presented these sites to the FTC guy, and he is no longer under the radar. So his examples should prove to be a positive asset.

I just saved a cache of http://www.minisitecreator2.com/special.html so I can watch the changes and compare the new to the old..

It's my opinion that now that this information is available, more and more big players will follow suit.. The video pretty much gave a solid explanation of what needs to be done. I also think Clickbank is going to send out warnings when they scan for offenders.

Again, your actions will depend on how legal you want to play. Most vendors should be perfectly fine doing a "sweep through" with some modifications, but the ones who's entire sites are based on outrageous claims will have a harder time.

 

Clickbank Blog Updated the issue today. they say:

The U.S. Federal Trade Commission continues to make internet commerce a top priority. The FTC recent issued new regulations that govern the use of “endorsements” to promote products. Those regulations can be found at 16 C.F.R. § 255 or here. Note, the new regulations are effective December 1, 2009.

The new regulations cover all sorts of third party testimonials and endorsements—by consumers, experts and celebrities. If your promotions use customer or consumer endorsements, the FTC requires that the results described must be typical or, if not, you should “clearly and conspicuously” disclose that the results presented are not typical. Also, such customers should be “bona fide” buyers of your product, and not, for example, a fictitious person or your cousin who is doing you a favor. For expert endorsements, the person involved should have special knowledge that qualifies him or her to make the endorsement, e.g., if you use a doctor to sell a diet plan, that doctor shouldn’t be an eye doctor, but have special knowledge in the area of nutrition.

Also, the FTC requires all endorsements to disclose any “material connection” between the vendor and the advertiser. For example, if an affiliate runs a website offering an “independent review” of two products and gives a favorable review of one, they should disclose the fact that they are receiving a commission from the sale of that product. These rules also apply to third parties, such as bloggers, who receive a free product and are asked to do a review. Under the new FTC rules, not only should the blogger disclose he got the product for free but the vendor who gave him the product should make some effort to make sure that the blogger makes that disclosure.

Please review these new rules yourself and if you have questions, please ask your own legal counsel. ClickBank cannot and does not give legal advice to our vendors or affiliates, and our approval of your product does not constitute an approval of any specific marketing, promotion or endorsement used to sell the product.

 

I'd like to know how the FTC will determine that a testimonial was indeed written by "a fictitious person or your cousin who is doing you a favor"

 

These rules by the FTC, whether one likes them or not, are simply an attempt to prevent advertisers from lying. If, as a consumer, you like to be lied to by advertisers, you are quite unique.

According to fair trade rules and ethics, each consumer should be able to make their purchase choices based on reliable information, and false testimonials are simply not true. It's something that just about every CB product advertiser seems to do but that doesn't make it right. Those who are annoyed about these regulations and are scrambling to change their websites to be in compliance should be honest at least to themselves... they have been caught red-handed lying to their potential customers.

There are still plenty of opportunities to create effective advertising while remaining inside the boundaries of accepted ethics. There's no regulation against hyperbole, subjective statements, urging, association, etc. Any advertiser who must blatantly lie about their products to make a sale really should consider another field of work.

 

DG, I respectfully disagree. A lot of people think these are about fake testimonials but that is not true although they will also have an added effect against these.

It's about customers having their expectations raised by seeing only exceptional testimonials (whether fake or not is not the issue).

If your testimonials are results driven then you need to conspicuously say that the results are not typical and quote the average results. OR you can take out the results-centric portions of your testimonials.

It doesn't have any bearing on those who peddle fake testimonials. In fact, it penalises the genuine vendors because they can no longer quote their own exceptional results without saying to the consumer "actually buddy, there's a bell curve and results may vary, also depending on what else you do". Not exactly a great sales pitch eh?

In fact, they can't even say "results may vary" anymore, they have to go the whole hog and give representative data. And when you say there's no regulation against hyperbole: well that is almost exactly the reason for this law. To provide the consumer with a more balanced picture and not just a face full of hyperbole.

Personally, I think this law is needless because surely we expect customers to have at least some intelligence?

 

I never included testimonials for my diet product because I didn't want to deal with possible legal issues, this was before all of this FTC stuff started up - but I'm really glad I did that now, saves me some hassle.