New FTC Rules and Guidelines – The Death of Affiliate Programs Has Been Exaggerated But Not By Much

I thought I was almost ready for the new FTC guidelines that go into effect on Dec. 1, 2009 until I listened to an interview between internet marketer, Jim Edwards, and Mr. Rich Cleveland, Assistant Deputy at the FTC.

After listening to it and taking notes, I realized that I needed to make more changes to my website if I wanted to stay off the FTC radar.  And I needed to let you know about the highlights as well.

This article is about some of those changes and how they will affect coaches and consultants.  It will also address some issues that weren’t covered or answered during my teleseminar in October on the new FTC Rules and Guidelines. In case you missed my FTC teleseminar, you can download the MP3 here: http://www.essdreamteam.com/ftc-offer.php.

This blog series will give you the highlights:

1. The death of affiliate programs has been exaggerated - but not by much
2. Affiliate disclosures are more strict than you thought
3. How does this apply to advertising?
4. Typical results in testimonials vs. your own results
5. Do you need to delete old testimonials?
6. FTC penalties

The death of affiliate programs has been exaggerated - but not by much.

One warning that came through loud and clear was that the FTC is going to hold companies responsible for the actions of their affiliates, whether those affiliates live in the United States or not.

The FTC is requiring companies to monitor their affiliate and employee endorsements and provide adequate training about the FTC guidelines for those endorsements.  This will place an enormous financial burden on many entrepreneurs and small businesses.

Solution: If you have an affiliate program, the safest option to protect yourself seems to be to restrict your affiliates to use only your company’s supplied promotion material.  This is similar to what a lot of MLM companies require.

Another possible option for those who have affiliate programs is to provide training to all affiliates that would explain the FTC guidelines regarding endorsements.  The company would then be required to monitor their affiliate’s promotional activities and remove any affiliates who violated the affiliate agreement.

Jim tried to explain to the FTC employee that it would be technically impossible to him to monitor all the activity of all his affiliates online.  That reasoning didn’t seem to sway the Assistant Deputy. As I recall, Mr. Cleveland’s opinion was that a company was responsible for the actions of their employees, and therefore the company should make an effort to monitor what that employee did.  Ditto for an affiliates.

They did say that the employee and affiliate monitoring requirement wasn’t a black and white issue but would vary from company to company depending on the risk to the consumer.  For instance, a company selling life saving medical equipment would be held to a higher standard that a company selling an eBook on “How to have a better garden.”

Conclusion: Expect some sweeping changes to coming to affiliate programs you may promote and consult your attorney about any of your own affiliate programs.

What do you think will happen to existing affiliate programs?  What changes are you planning to make?  Leave a comment and let us know.

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If you want to listen to the entire interview between Jim Edwards and Mr. Rich Cleveland, Assistant Deputy at the FTC, you can hear it here: www.igottatellyou.com/blog/ftc-change-interview.  (But I’ll warn you that the conversation is about as interesting as listening to as two CPAs discussing the latest changes in the tax code.)

As always, please note that no legal advice is dispensed in this article or on our website, and any information or opinions shared are for educational and entertainment purposes only.  If you want legal advice, please seek the services of an attorney for your particular circumstances.

Related posts:

1. New FTC Rules and Guidelines – Affiliate Disclosures are More Strict than You Thought Here’s another highlight from the interview between Jim Edwards and FTC assistant deputy, Mr. Rich Cleveland.  It’s regarding affiliate disclosures....
2. New FTC Rules and Guidelines – How Does This Apply to Advertising? Here’s another highlight from the interview between Jim Edwards and FTC assistant deputy, Mr. Rich Cleveland.  It’s regarding advertising and...
3. New FTC Rules and Guidelines – Do You Need to Delete Old Testimonials? In light of the new FTC rules, do you need to delete old testimonials?  There was a lot of concern...
4. New FTC Rules and Guidelines – Using Typical Results in Testimonials The FTC is very concerned about typical results used in testimonials.  Here’s another highlight from the interview between Jim Edwards...
5. New FTC Rules and Guidelines – Use Your Own Results for a Testimonial Do the same rules about “typical results” that apply to customer testimonials also apply when stating your own results? Here’s...
6. New FTC Rules and Guidelines – When to Use “Material Connection” Disclosures The FTC has announced some major changes to their advertising rules regarding testimonials and endorsements.  And one of the biggest...
7. New FTC Rules and Guidelines – Why Do I Need Legal Statements On My Website? Linda Joseph and I had an incredible teleseminar Thursday night about the new FTC rules and guidelines.  If you were...

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3 Responses to “New FTC Rules and Guidelines – The Death of Affiliate Programs Has Been Exaggerated But Not By Much”

1. Mike Harmon Says:
   December 1st, 2009 at 10:45 pm

   I’ve been reading along for a while now. I just wanted to drop you a comment to say keep up the good work.

2. New FTC Rules and Guidelines – The Death of Affiliate Programs Has … | My Dollar Street Says:
   December 2nd, 2009 at 1:52 am

   [...] more from the original source: New FTC Rules and Guidelines – The Death of Affiliate Programs Has … Tags: Affiliate Programs You can follow any responses to this entry through the RSS 2.0 feed. [...]

3. Karen Brunet Says:
   December 2nd, 2009 at 1:54 am

   Thanks, Mike. I’m glad to share what I learn about the new FTC rules with consultants like you. You’ll enjoy the rest of the series in the coming week as well.

   As an accountant, I hope you appreciated my humorous comment about the 2 CPAs discussing the latest tax updates. LOL

   Let me know if you have any questions, and I’ll try to help.

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