Illinois Attorney General Cracks Down On Affiliates Using Deceptive Practices
Recently, I received a stellar letter from Azoogle Ad Network (AZN) regarding their stance on the current state of litigation occurring on our industry. Here is an excerpt:
ï¿½The Illinois State Attorney Generalï¿½s Office, Oprah Winfrey, and Dr. Oz have filed a number of suits in the past day which may affect your business. The lawsuits send a clear message that using deceptive ad content, e.g., fake celebrity endorsements, not disclosing the price and re-bill terms, using fake blogs, etc., will not be tolerated. Please read the following for more information:
The Illinois State AG has filed actions against three parties for deceptive advertising practices in the marketing of acai berry products and other dietary supplements. Please keep in mind that the regulators are choosing to directly pursue affiliate marketers for their marketing practices. The full text of the press release can be found here: Illinois Attorney General – MADIGAN FILES LAWSUITS AGAINST ACAI BERRY COMPANIES.
Dr. Oz and Oprah Winfrey have also filed a lawsuit in New York for copyright and trademark infringement against approximately 50 companies, including advertisers, suppliers, ad networks, and affiliates. To put it bluntly, they are very unhappy of their celebrity status being used to market dietary supplements and cosmetics, without their permission. They have specifically listed hundreds of affiliate sites they want discontinued immediately, because the URLs use their name or the sites claim endorsements from Oprah/Dr. Oz. The full story can be found here: Oprah, Dr. Oz sue over false endorsements – Celebrities- msnbc.comï¿½
I agree completely with the actions of the AG in Illinois and NY, and as former head of a network, I can also tell you that the FTC crackdown that happened on July 1st is only the first wave in a new round of compliance wars aimed squarely at the Biz Opp and Health verticals.
For too long (and I have been doing this for 12+ years) there has been a proliferation of substandard crap when it comes to offers. How can a consumer make a decision based on less than 50 words of copy and obtuse Terms & Conditions? These are the campaigns that all networks should be self policing themselves. I can tell you that there are several top networks, Azoogle and ClickBooth included, that take great pains to put campaign through compliance reviews. They are not the norm.
As much as overly aggressive affiliates are to blame, networks also need to shoulder the responsibility of not putting these offers in front of publishers. The problem is, faked endorsements, celebrity pics and patently false testimonials actually do outperform a long format sales page or even a factually based sales page. Why? The only thing I can come up with is that these are the same people who buy carloads of Sham Wow’s and Snuggie’s. They are not rocket scientists, nor even good shoppers.
Networks, if they want this segment of online advertising to survive and attract larger advertisers, need to collectively promote only compliant campaigns – no matter how much an advertiser is willing to pre-pay.
In order to be compliant, you should look for the items Azoogle (thanks Marc P.) mentioned above, for sure, but here are a few other tips affiliates can use to judge if an offer is compliant.
– Does the site explain any continuity/subscription charges above where the “action” on the page is. This could be a button, a form, or even a cart (in the case of an all-in-1 page format), whatever the “action” the end user is supposed to take on the page. If the page does not explain that after the initial Risk Free Trial, they will be charged X for whatever it is they are buying, then stay away. This is what the FTC will be looking for next. These disclosures need to be located ABOVE the action.
– Does the site have an Earning Disclaimer on the page, not in a link.
– Does the site have a Terms & Conditions that has an 800# to reach Customer Service. Also, does the T & C clearly spell out how to receive a refund or how to opt out of the Risk Free Trial (beware of convoluted processï¿½ of having to obtain a pin number from one phone number and then a series if steps to receive the actual refund)? I suggest calling the number and see what happens, possibly ask the operator how many refunds they issued that day.
– If the campaign is a Risk Free Trial, does the site clearly disclose directly near the word FREE what the S/H fees are? Is it in typeface greater than 9 pica?
– If you are truly serious, order the product and see for yourself what the ordering experience is, and then attempt to return it.
– Never promote an offer that tells you that the $1 they are charging the consumer is going to be donated to charity and that this makes the offer totally free to the consumer. They are only using the transaction to get consumer’s information, as well as check to see if the card has money on it so they can rebill it.
– Never promote an offer that is using any images of celebrities unless their name is on the product itself. Oprah does not endorse any particular brand of Acai berry. And the use of News Network logo’s is also a tip off that you may want to not promote this. In addition, if you see McAfee or HackerSafe badges, click on them, if they are not linked or unclickable they are there to deceive the consumer.
– Lastly, make sure you do a search for the advertiser’s legal name and their address (should be disclosed in the T & C). Search for their name and add in the words “scam”, “fraud” or “spam”. You will also want to search the BBB to see if there are any unresolved complaints against the advertiser. NOTE: Beware of false review sites such as RipoffReport.com, they often have ulterior motives for posting negative reviews ï¿½ such as charging the advertiser to remove them or worse yet, getting money to write a positive review.
These are all things networks should police, in my opinion. I know I did at Offeratti, but we had a different approach to being a network. I wish I could say that for all networks.
I applaud these actions by state’s AG’s, deceptive practices and Trademark infringement hurts everyone in our little niche of Internet Marketing. If we do not police ourselves it will be done for us and we will remain a little niche to major advertisers. And if you think the government isn’t watching, well I suggest you visit www.ftc.gov and peruse the guidelines they have for advertisers of Health products or Business Opportunity. You may think you can never promote another product again! You can, you just have to demand better from the networks who have taken these campaigns on as advertisers.