How the FTC Compensation Disclosure Guidelines
(December 1st 2009) Impact You
[Please note that this is not legal advice. Please consult your Internet Business Lawyer to address your specific legal concerns.]
Do you use customer or personal testimonials to market your products or services?
Are there endorsements that others make about you and your products or services?
Do you have people who refer you to their customers when you give that referrer free stuff or compensation?
Do you pay anyone to talk about you or your services, on your behalf, on the web, where the customer may not be aware that the talker is being paid/sponsored?
These questions by Robert Skrob cover most of those who are impacted by the change to the FTC (Federal Trade Commission) Compensation Disclosure Guidelines, December 1st 2009.
Fortunately for you and me, although the wording seems tricky, it all boils down to some simple steps and concepts that are actually really good for us as a consumer.
It is easy for people to think that, because the FTC isn’t hunting you down (it only reviews you if someone reports you, currently), that there is no reason to get compliant. This is FAR from the truth. If you’ve been on the net for long you know how easily it is to make just one person mad or jealous. All it could take is one report.
Many of you tell me “But they can’t get blood from a turnip”. True, but they can take what little you DO have and they can make your life a nightmare. Also, they can sit on their hands until you are making big money and come and slap you all the way back into the stone age. (And, the minute you use that statement you DESTROY your ability to manifest wealth because you just told yourself you will never have it.) You need to view this from “in 2-5 years, I will be sitting on millions, what do I need to do to protect that asset NOW!“
One of the top lawyers in internet business law is named Mike Young, and he is an attorney for people such as Mike Filsaime who have multiple streams of 7 figure incomes. This man knows his stuff. He also knows how to defend marketers without turning us into grinches!
I read a special report by Mike young, in Mike Filsaime’s MarketingDotCom Newsletter, that was the absolute best review of the law changes… in easy English… that I had seen! I was absolutely thrilled to just discover that Mr. Young has made it available as a free download on his site (no opting in even required if you don’t want!) Guys & Gals…. get this! print it! read it! save it! Is that clear enough?
A Few Of The FTC Issues for Networkers & Affiliates
- No longer does “results may vary” or “results not typical” protect a company, or an individual reseller/affiliate, from legal action. All representations are required to provide “results generally expected”. If you circulate a advertisement for a company you represent that uses “not typical” language, YOU are just as liable in court as they are now.
- A paid advertiser, sponsor or spokesperson for a company that claims to be using the product/service and getting certain results, is now legally bound if they are found to not be using the product/service or if the results do not match their claims. Hiring someone to make bogus claims can now (in my opinion appropriately) land that someone in jail with you! In addition, all marketers for all companies and affiliate systems are now fully the responsibility of their affiliate system, and a affiliate that misbehaves can land the entire company in court!
- All material connections (be they free products, services, or commissions) by a advertiser/marketer to a product must now be FULLY disclosed. This used to only be the job of the advertiser but now falls on the shoulders of the ENDORSER. This means if you review or recommend a product or service, regardless of the media type, you MUST specify your connection to the company. This applies to everything from network marketing products to affiliate links. This has heavy implications for affiliate links, link masking, network products, and those who review products and receive a free copy of the product to review. Both Disclosures and Disclaimers now carry much stronger importance, don’t skimp on either!
Get the pdf and read it! It’s full of some really great examples that clarified the issue for me. (If you’re really brave/smart, read the comments some of which talk about the upcoming FTC Opportunity Rule that is going to further complicate things in the future. This is just step one. You do not want to wait until that goes in effect to try to scramble.)
Once you’ve read that, and understand that while yes this changes the playing field, its a good thing for consumers, then you need to understand what you can do to protect your business. This affects every ounce of communication within our business field including facebook, twitter, emails, auto responders, videos and personal representation.
Look for some additional posts on this topic coming up in the weeks ahead! I have several things yet to share!
The FTC rules affect a lot of people doing business on the internet today. However, even though we saw a LOT of hype and a lot of scare about how this was going to harm the industry, it actually is GOOD for the consumer (and the small business owner). By keeping your customers and clients first, you can use this disclosure to build greater and greater trust between you and them. When you are 100% transparent and 100% authentic you will create a bond with your clients, prospects and customers that no change in business legalese can shake. Give to your customers and clients the absolute best you can, yet use your highest logic skills to protect yourself and your business. As always, Serve with You Heart, but Follow with Your Head.
Hopefully this helps you better understand both your obligations and your RIGHTS as a business consumer. It hopefully takes some of the fear out of what steps you need to take to protect your business. Have you found any other great resources on this topic? If so, please share them as I’m always looking to learn more and so are other readers here! Have any questions? Want to toss around some ideas? While I can’t give legal advice, it’s indeed fun to brainstorm! Leave me a comment and let me know what YOU are going to do to protect yourself!
PS: Check out part 2 for ways you can implement changes that allow you to be compliant!
PSS: I also have an affiliate link for a website/blog legal forms generator package created by Mike Young. It was simple, easy to use and covers several possibilities. I still have some parts of it I need to implement (or re-implement since my theme change) but I really enjoy it. However, it wont protect you from aspects aspects of behavioral non-compliance.