A4D Charged by FTC for 1 million + publishers can't ever run Advertorials/rebills? (24)
A4D Charged by FTC for 1 million + publishers can't ever run Advertorials/rebills?
Saw this the other day linked on a blog. I don't personally run with A4D, but sad to see this is still going on.
http://www.ftc.gov/opa/2012/09/coleadium.shtm
Yep they finally made this public.
We emailed our affiliate base and let them know over 2 weeks ago what was going on. So shouldn't really be news to anyone.
Yea i got this E Mail
Thanks Smaxor
What about other networks ? Only A4D had this tough nut to crack ?
First network to actually do that anyway. Smax is bawse.
I don't know about A4D, but you can definitely run rebills and advertorials as long as you have an ftc compliant disclaimer on your site in plain view for everyone to see and state facts and verifiable claims not made up exaggerated bullshit.
Originally Posted by mi6430
for those if you who plan to run rebills/advertorials in the USA I would highly suggest you get solid legal advice....its worth every penny you will pay for it.....
Not giving council, nor qualified to do so. Simple fact is that I still see a lot of rebills out there, just look at skin care, but now the top earners have diclaimers all over their sales page. unlike before, where the consumer was lied to with free trials and freeoffers. So, let's not go overboard and say rebills are dead or the FTC is lurking in every corner. The affiliates that got royally screwed were deceiving the public in plain sight
Almost everything out there still running the FTC would call uncompliant. Often people try to make justifications on why whatever they're doing it different and how it adheres to the law. The one thing about the FTC is they don't care about the letter of the law. It's all about "consumer perception". If they believe that the consumer could believe something based on who stuff is presented then that's how they sue. You can pick apart this thing or that thing but it's much more about the whole.
There was no conversations about specific points of compliance. Only the overall perception to the consumer.
They like to use words like "express or implied" and "know or should have known". Sure you can fight these vagaries but it's really a losing battle.
And always remember this just because something is running out there and they haven't been taken down yet doesn't mean anything at all. Look at the Jeff Paul bizopp guys they ran on TV for 4-5 years. Everyone said oh look at what they're doing that must be ok, well they just hadn't got to them yet and were building a case.
The thing with these FTC actions is that they could easily be a chain reaction -
they go after the owner of the owner & try and find out who they paid (the networks)
go after the affiliate network & try and find out who they paid (the affiliates)
go after the affiliates & see who else they were promoting
restart the cycle
Any views on this? Is this likely practice?
Any affiliate considering promoting rebills should read this:
http://www.ftc.gov/opa/2011/04/fakenews.shtm
tell me this does not apply to most of the rebill campaigns out there:
http://www.ftc.gov/os/2011/04/110419fakenews-exha.pdf
Looks familiar?
It says advertorial it has the terms at the bottom.
It didn't make any difference.
These 10 still got done.
Jason, I understand what you are saying absolutely. Whenever you go thru the court system, its hell. All I am saying is that the stuff that I see, myself included, by the big volume generators of rebills have easy to read in laymen term disclaimers now, even attorney drafted all over the sales page. Before, you did not see any disclaimers whatsoever. I completely agree with what FTC has done with some of the outright fraudulent affiliates out there. To offer free trials and offers without disclosing the re bill structure to the consumer in plain sight is absolutely fraud, not to mention making false claims and using phony testomonials. Most of the people that we have heard that the FTC has busted were not compliant, plain and simple. As discussed in another thread, Netflix, Your Local Gym, Credit Card Offers, these are all re-bill structures. But I assure you Netlix and the rest have rock solid legal disclaimers and don't make false claims.
Another thing to note, and anyone correct me if I am wrong, I have not heard the FTC going after single operator or even small company affiliates that generate 1k-10k a day for short periods of time on various offers. Most cases are of Networks and or large brand affiliates who generate millions of dollars of revenue. Now, can or has the FTC come after a lonely affiliate for non complaint re bill activity, sure, but I wouldn't loose sleep over it. Just be compliant, don't bullshit or make false claims, work on solid offers and disclose the rebill structure completely in plain sight. If still you have the misfortune of the FTC coming after you, then fuck it, just pay the fine. They are not going to kill you, its all about money at the end.
You earn the fruits of your business. Seriously, I have run a rebill system on my own locally back some time. Not only advertising, but similiar idea like the rebill discussed here. It's basically just asking for trouble in longterm promoting the way most people do (and that's unfortunately the way you bank on it most).
This sample rebill clearly is non compliant due to the fact that it presents itself as a news site. "Health News". Falsely claims that the reporter, herself, is actively trying the product and reporting on it. So, the entire article is completely fraudulent. You can't just make false claims and then put a disclaimer at the bottom stating that your presentation was a lie. The legal system doesn't work that way.
Just so everyone knows this has very very little to do with continuity.
It has everything to do with diet, bizopp, news landers and false claims.
It was all about deceptive advertising, not about billing practices. We still run quite a few continuity products.
Been reading those FTC statements... aren't those fines for the 10 guys in this case pretty low? Jason settled for "only" 1 million, the other 8 who got caught paid 2 million between all of them, not sure what happened to the 10th guy.
Don't get me wrong, I'm happy that they didn't lose their whole bank accounts (especially you Jason 
). But bottom line, isn't that low compared to the money these rebills generated? Am I missing something here?
No all those people lost everything they had for the most part.
Anyways Smax...it was a great idea settling up for that 1 mil.
Doesn't compute for me still...
From the FTC's own site:
"According to the FTC, the defendants collectively have paid more than $10 million to advertise their fake news sites, and have likely received well in excess of that amount in ill-gotten commissions."
"As part of its ongoing crackdown on bogus health claims, the FTC brought 10 cases against fake news site operators in April 2011. Eight have been resolved, with the defendants paying collectively more than $2 million."
We all know the rebill craze generated a lot more than 2 million (or even 10) in profits. Unless the FTC specifically targeted affiliates who didn't do that well, I don't see how they could have lost it all..
I imagine this is a sensitive subject, sorry if I'm asking too much. I ask because this affects us all. It's a different kind of environment if people are losing all they have, or if they make 10+ million and later settle for 2. We all need to understand this to know what to push and how far to push it. We all worry about the FTC, if anything these press releases indicate we should be less worried. If I'm reading it wrong, someone please enlighten me. 
the ftc probably doesnt care what you spend on making those commissions (for affiliates). Likely they just grabbed whatever was left from those affiliates
I remember hearing that they took one of the guy's cars along with his financial assets.
I don't think they'd be taking possession of personal vehicles if they were letting these guys off easy, but who knows.
Originally Posted by Smaxor
For all of the reasons you listed above, these are the reasons why we completely stay away from health rebills of any sort. Although the FTC may not expressly say something is not compliant, they can at any moment decide that something is not compliant, and in a space where a huge percentage of consumers are getting screwed out of their money, they will do this (and have).
Originally Posted by mi6430
Continuity is perfectly fine as long as you handle it properly and address customer demands, requests for refunds, etc. Netflix you could get scammed into a subscription, but pretty much everyone would be able to see the value in the offer, and they let you cancel hassle-free if not. Honestly your local gym is probably the biggest scammer of all, because it can overbook its capacity and rely on peoples' innate desire to fail to keep their commitments, and then get the user to blame themself for their failure.
Originally Posted by timtetra
I don't understand when you say " People have to cancel their credit cards" to stop payment. If you ever come across any company that refuses to stop billing, just call the credit company ask for a charge back and stop payment to the merchant. Why would anyone cancel their credit cards?
Not everyone understands how to do that, most people would panic and just cancel it as if the card had been stolen. Though you would think the bank would advise them to do what you suggested.
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